F&O: India Vix rules out major swings, supports buying on dips
Nifty50 formed a bearish candle on the daily scale followed by multiple Doji candles.
Nifty50 failed to surpass the immediate barrier in the 11,975-12,000 zone and witnessed selling pressure towards 11,866 level. It negated the formation of higher highs and lows after three sessions, but followup profit booking was also missing at lower levels.
The index formed a bearish candle on the daily scale followed by multiple Doji candles, which indicated a tug of war in the 11,761-12,000 zone. Now as long as it holds below 12,000 level, Nifty could extend its weakness towards the lower band of the support at 11,761 level and then see a fresh decline towards 11,660 level, while on the upside immediate hurdles are seen at 11,965 and then 12,000 levels.
On the options front, maximum Put open interest was at 11,500 followed by 11,800 levels, while maximum Call OI was at 12,500 followed by 12,000 level. Put writing was seen at 11,500 followed by 12,000 levels while there was Call writing at 12,000 followed by 12,100 levels. The option data suggested a wider trading range between 11,750 and 12,100 levels.
India VIX fell 2.54 per cent to 14.12 level. Volatility hovered below the 16 mark, which supported buying interest on declines, but at the same time ruled out any major swing in the market.
Bank Nifty opened in the negative and headed towards the 30,900 level. It formed a bearish candle on daily scale and negated the formation of higher highs and lows after three sessions. As long as it holds below 31,313 level, the index could extend its weakness towards 30,600 level, while on the upside hurdles are seen at 31,313 and then 31,500 levels.
Nifty futures closed in the negative at 11,925 with a loss of 0.43 per cent. Long buildup was seen in Torrent Pharma, Jet Airways, Bata India and Tata Steel while shorts were seen in Biocon, Indiabulls Housing Finance, BEML and CEAT.
(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)