F&O: Market seeing buying on every dip; India VIX rose 2.15%

F&O: Market seeing buying on every dip; India VIX rose 2.15%

Nifty opened negative on Tuesday amid weak global cues, but managed to hold near the 14,050 level and witnessed a positive momentum by surpassing the previous high of 14,147 level. The index moved northward throughout the day and hit a new record lifetime high of 14,215 in the last hour of trade.

Supports are gradually shifting higher, and dips are being bought into, which indicates the dominance of the bulls. The index formed a bullish candle on the daily scale and continued its winning streak by forming higher highs for the ninth session in a row.

Now, it has to hold above the 14,000-14,050 zone to witness a fresh rally towards the 14,400 and 14,500 levels, while on the downside major support exists at 13,900 and 13,777 levels.

India VIX moved up 2.15% from 20.03 to 20.46 level. Volatility needs to sustain below the 20 level to support the bullish market setup and fuel the next rally with a higher market base.

On the Options front, maximum Put open interest stood at 13,000, followed by 13,500, while maximum Call OI is at 14,000 followed by 14,500 levels. Minor Call writing was seen at 14,600 and then 14,300 levels, while there was Put writing at 13,700 and then 14,000 levels. Options data suggested a wider trading range between 13,700 and 14,500 levels, while the immediate trading range is seen between 14,000 and 14,400 levels.

Bank Nifty opened in the negative, but made a good comeback and moved towards the 31,750 level. It moved in line with the broader market and banking stocks showed massive strength during the day. It saw the highest daily close in 243 sessions and settled the day 492-point higher. The index formed a strong bullish candle, akin to a Bullish Engulfing pattern, on the daily scale, which indicates the bullish bias can continue. Now, the index has to hold above 31,500 level to witness any bounce towards 32,000 and 32,500 levels, while on the downside, support exists at 31,200 and 31,000 levels.

Nifty futures closed positive at 14,216 level with a 0.36 per cent gain. There was positive setup in Axis Bank, RBL Bank, Apollo Hospital, Muthoot Finance, LIC Housing Finance, HDFC, Berger Paint, Wipro, Havells, Amara Raja Battery, Titan, Lupin, HUL, Cummins India, ICICI Bank and HCL Tech, but weak in PEL, NTPC, Coal India, Bajaj Finance, RIL and PowerGrid.

(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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