F&O: Higher lows for Nifty, cooling VIX support the bull case for Nifty

F&O: Higher lows for Nifty, cooling VIX support the bull case for Nifty

Nifty opened positive on Friday and remained consolidative in a 50-point range, but showed strength to hold above the 14,000 mark. The index started the new F&O series and the new decade on a positive note, as it moved up steadily throughout the session to scale a new record lifetime high of 14,049.

Nifty continued its winning streak and formed higher lows for seven sessions. Now, it has to hold above 13,850 level to witness a fresh rally towards 14,200 and then 14,500 marks, while major support on the downside exists at 13,777 and 13,700 levels.

India VIX fell 7.30% from 21.09 to 19.56 levels. A cool-off in volatility below 20 level supports the bullish market setup and fuels the bulls with a higher market base.

Since it is the beginning of new F&O series, options data lay scattered at different strike prices. Maximum Put open interest was seen at 13,000 level followed by 13,500, while maximum Call OI stood at 14,000 followed by 14,500. Options data suggested a wider trading range between 13,500 and 14,500 levels, while the immediate trading range was seen between 13,800 and 14,200.

Bank Nifty opened positive, but failed to surpass the previous day’s high of 31,400 and traded flat to negative throughout the session. It moved in a narrow range with a comparative choppy session and settled the day with a loss of around 40 points. The index formed a small bearish candle along with an Inside Bar on the daily scale and a bullish candle on the weekly scale. Now, it has to hold above 31,000 level to witness a bounce towards 31,500 and 31,750 levels, while on the downside, support exists at 30,800 and 30,500 levels.

Nifty futures closed positive at 14,053 level with 0.31% gains. The trade setup looked positive in Chola Finance, BEL, Adani Ports, LIC Housing Finance, L&T Finance, Ashok Leyland, Lupin, M&M Financial, ITC, SRF, Tata Consumer, SBI and Siemens but weak in Hindalco, Exide India and Kotak Bank.

(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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