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F&O: Nifty50 sending out mixed signals; VIX spike adds to worries

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By Chandan Taparia


Nifty opened with a gap up for the second consecutive session on Monday and headed towards the 11,580 level. However, the market undertone remains bullish for most part of the session, and the index witnessed a decline of around 100 points from higher levels to settle near 11500 level.

The index has been making higher lows since last six sessions and supports are shifting higher gradually. The index formed a bullish candle, but a Spinning Top kind of formation, as it failed to hold at higher levels.

It surpassed the falling supply trend line on the daily scale by connecting the recent swing highs and saw the highest daily close in last 10 sessions. Now, it has to hold above 11,450 level to witness a further up-move towards 11,600 and 11,700 levels, while on the downside major support exists in the 11,350-11,333 zone.

India VIX rose 7.38 per cent from 18.35 to 19.70 level. It negated the formation of a lower bottom, but the market undertone remained bullish. It needs to cool down for the bull’s grip to continue on the market.

On options front, maximum Put open interest remained at 10,500 level followed by 11,000, while maximum Call OI was at 12,000 followed by 12,500 levels. Marginal Call writing was seen at strike prices 11,800 and 12,100 while there was Put writing at 11,500 and 11,400 levels.

Options data suggested a wider trading range between 11,000 and 11,800 levels, and an immediate trading range in the 11,300-11,700 zone.

Bank Nifty opened positive and continued buying interest towards the key hurdle at 22,750 level, but failed to sustain at higher zone. It continued to form higher tops and bottoms on the daily scale, but formed a Doji candle with a long upper shadow, which indicated absence of follow-up buying interest. Now it needs to hold above 22,222 level to witness an up-move towards 22,750 and then 23,200 levels, while on the downside, key support exists at 21,750 and then 21,500 levels.

Nifty futures closed positive at 11,526 level with 0.80 per cent gains. The trade setup looked positive in TCS, Wipro, Cadila, Marico, Aurobindo Pharma, Sun Pharma, JSW Steel, Godrej Consumers, TechM, Divi’s Labs and Infosys but weak in Indiabulls Housing Finance, IGL, Bharti Airtel and Concor.

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

(Disclaimer: The opinions expressed in this column are that of the writer. The facts and opinions expressed here do not reflect the views of www.economictimes.com.)

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