F&O: Bulls, bears in a tug of war; falling VIX may help bullish view

Nifty on Thursday opened with a gap up, but got stuck in a range for most part of the session. It formed high lows with support at 14,500 level, but traded inside the trading range of last session. It has been hovering near its 50 DMA for last few sessions and requires a decisive breakout with a hold above 14,600 level to commence the next leg of bullish stance.

Technically, the index formed an Inside Bar and a Harami Cross sort of candles on the daily scale, which indicated a tug of war between the bulls and the bears in the market. Now, it has to hold above 14,600 level to witness a bounce towards 14,700 and 14,880 levels, while on the downside support exists at 14,500 and 14,400 levels.

India VIX fell 4.55% from 23.01 to 21.69 level. India VIX needs to hold below 20 level to again attract a bullish stance.

On the options front, maximum Put Open Interest stood at 14,000 level, followed by 13,500, while maximum Call OI was seen at 15,000 followed by 15,500 levels. There was marginal Call writing at strike price 15,000 and minor Put Writing at 14,600 and 14,000 levels. Options data suggested a wider trading range between 14,000 and 15,000 levels, while the immediate trading range stood between 14,400 and 14,800 levels.

Bank Nifty opened with a gap up. While it remained muted in a range in the first half, the second half saw a slight recovery. Despite lack of strength, the banking index outperformed the broader market and concluded the session with a gain of around 500 points. The index formed a Bullish Hammer sort of candle on the daily scale with a long lower shadow. Now it has to hold above 32,500 level to witness a bounce towards 33,333 and 33,500 levels, while on the downside support exists at 32,250 and 32,000 levels

Nifty futures closed positive with 1% gain at 14,694 level. Among specific stocks, the trade setup looked bullish seen in Lupin, BHEL,

, NMDC, Sun Pharma, , UPL, Apollo Hospital, BEL, McDowell, Vedanta, Mindtree, Axis Bank, SRF and HPCL but weak in Adani Ports, Siemens, Apollo Tyre, Tata Chemicals and M&M Financial.

(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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