F&O: Nifty trading range widens to 13,800-14,800; VIX needs to cool down

F&O: Nifty trading range widens to 13,800-14,800; VIX needs to cool down

Nifty on Monday opened with a gap up of more than 100 points in line with positive global cues and stayed at higher levels. A slight dip was seen in the initial half of the day, but soon it escalated to yet again touch a lifetime high near the psychologically important 14,500 level. The index finally settled the day with a decent gain of around 140 points.

It formed a bullish candle on the daily scale along with a long lower shadow, which showed dips are being bought into quickly and the bulls are in full action. It continued to form higher highs for the 13th trading session. Now it has to hold above 14,300 level to witness a fresh move towards 14,600 and 14,750 levels while on the downside major support exists at 14,200 and 14,100 levels.

India VIX rose 8.44% from 20.64 to 22.38 level. Volatility needs to cool down below 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 14,000 level, followed by strike price 13,000, while maximum Call OI was at 15,000 followed by 14,000 levels. There was minor Call writing at 15,000 and then 14,700 levels, while there was Put writing at 14,000 and then 14,400 levels. Options data suggested a wider trading range between 13,800 and 14,800 levels, while there is an immediate trading range between 14,300 and 14,600 levels.

Bank Nifty opened with a gap up, but could not sustain at higher levels and remained quite choppy with some selling pressure for most part of the session. It moved in a range and closed with a loss of around 100 points. The index formed a bearish candle on the daily scale and negated the higher highs of last four sessions. Now, it has to hold above 31,750 level to witness a bounce towards 32,500 and 32,613 levels, while on the downside, support exists at 31,500 and 31,200 levels.

Nifty futures closed positive with a gain of 0.86% at 14,495 level. The index witnessed a positive trade setup in Tata Motors, HCL Tech, Infosys, Wipro, HDFC, Lupin, Tata Consumer, Ashok Leyland, Maruti, Bajaj Auto, TechM, MRF, Cipla, Colgate Palmolive, McDowell and Biocon but weak in Shriram Transport, Indiabulls Housing Finance, RBL Bank, M&M Finance, Bajaj Finance, RIL, PNB, Kotak Bank, Canara Bank and IndiGo.

(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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