F&O: Nifty50 knocking the doors of lifetime high zone; VIX spike a worry

F&O: Nifty50 knocking the doors of lifetime high zone; VIX spike a worry


By Chandan TapariaNifty opened positive on Thursday, led by buying interest in technology stocks, and headed towards the 11,900 level. However, the index witnessed a decline of around 100 points from higher levels in the last hour of trade, but still managed to extend the winning streak into the sixth consecutive session.

The index continued the formation of higher lows for the ninth session and the entire market base shifted higher to hit the psychologically important 12,000 level and knock on the doors of lifetime high zone.

The index closed the session with a decent gain of around 100 points, but formed a Doji candle on the daily scale, as it closed near the opening level. It also tested the 11,900 level during the day and saw the highest daily close in 143 sessions since February 24. The index has been moving northward and soared more than 1,000 points in last 10 sessions, but the overall setup remains bullish and any small decline could trigger buying on dips.

Now, Nifty has to hold above 11,700 level to witness a further bounce towards 11,900 and 12,000 levels, while on the downside major support exists at 11,600 level.

India VIX moved up 1.60 per cent from 20.06 to 20.38 levels. It needs to cool down for the bull’s grip on the market to tighten.

On the options front, maximum Put open interest stood at 10,500 level followed by 11,000, while maximum Call OI stood at 12,500 followed by 12,000 level. Marginal Call writing was seen at strike prices 12,200 and 12,100 while there was Put writing at 11,800 and then 11,500 levels. Options data suggested a wider trading range between 11,400 and 12,000 levels, while the immediate trading range is seen between 11,600 and 12,000 levels.
Bank Nifty opened positive and headed towards the 23,500 level in the initial part of the session. However, it saw a dip of around 400 points from higher levels due to profit booking in last hour of trade, but still managed to close positive with a gain of around 1%. The index continued its winning streak for the sixth consecutive session. It made higher highs and lows for the fifth consecutive session and formed a Spinning Top candle on the daily scale, as it failed to hold at higher levels. Now it has to hold above 23,000 level to witness a bounce towards 23,500 and then 24,000 levels, while on the downside, key supports exist at 22,750 and 22,500 levels.

Nifty futures closed positive at 11,830 level with a gain of 0.67 per cent. The trade setup look positive in Wipro, Cadila, Cipla, Biocon, Apollo Hospital, Ultratech Cement, Divi’s Labs, Glenmark, ACC, SRF, Lupin, Dr Reddy’s, Torrent Pharma, Voltas, Ambuja Cement, Grasim and Hero MotoCorp but weak in Vedanta, Tata Consumers, ONGC, GAIL, ITC and Coal India.

(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)

Credit: Stocks-Markets-Economic Times

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