F&O: Nifty range shifts higher to 13,500-14,000; cooling VIX aiding bulls

F&O: Nifty range shifts higher to 13,500-14,000; cooling VIX aiding bulls

Nifty opened with a gap-up in line with global market trends and continued gaining strength to head towards a new lifetime high. It saw a small dip in the initial hours after the rally but recovered well throughout the day to close with a gain of around 150 points. The index formed a bullish candle on the daily scale and made higher lows for the third session in a row. Now it has to hold above 13,600 level to witness a fresh rally towards a mew lifetime high of 13,850 and then 14,000 levels, while on the downside major support exists at 13,500 and 13,333 levels.

India VIX fell 2.60% from 20.49 to 19.96 level. The cooling of volatility at higher levels has provided support for a decent bounceback and now it has to hold below 19 level to help the bulls hold a grip on the market.

On the options front, maximum Put open interest stood at 13,000 level followed by 13,500, while maximum Call OI was at 14,000 followed by 14,500 levels. There was Call writing at 14,000 and then 14,200 levels while Put writing was seen at 13,700 and then 13,600 levels. Options data suggested an immediate trading range between 13,500 and 14,000 levels.

Bank Nifty opened with a gapup above 30,000 level and continued its northward journey towards 30,500 level. The banking index settled the day with gains of around 500 points. It formed a bullish candle on the daily scale and a long lower shadow on the weekly scale, which indicated that every decline got bought into. Now, Nifty has to hold above 30,200 level to witness a bounce towards 31,000 and 31,200 levels, while on the downside, support exists at 30,000 and 29,800 levels.

Nifty futures closed positive with 1.10% gain at 13761 level. The trade setup looked positive in Sun Pharma, Cadila, Axis Bank, ICICI Pru, RIL, Kotak Bank, HDFC, Divi’s Labs and Cipla but weak in PVR, Ramco Cement. Cummins India, Jindal Steel and Apollo Tyre.

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

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