F&O: Nifty trading range shifts to 15,500-800 range; VIX is up

Nifty on Tuesday opened negative and cascaded deep in into the red for the first half of the session and broke its immediate support to touch low of 15,578 level. It witnessed some recovery from lower levels in the second half of the session, but failed to hold at higher levels and closed with a loss of 120 points, as selling pressure swept across the Street. Nifty formed a bearish candle on the daily scale and continued to form lower highs and lows for the last second session. Now, it has to cross and hold above 15,700 level to witness a bounce towards 15,800 and 15,900 levels while on the downside support exists at 15,550 and 15,450 levels.

India VIX moved up 4.14 per cent from 12.68 to 13.20 level. A spike in volatility is seen due to a profit-booking decline in the market, but an overall lower VIX can again attract some buying interest on declines near key support zones.

On the options front, maximum Put Open Interest was seen at 15,000 level followed by 15,500, while maximum Call OI stood at 16,000 level followed by 15,800. There was Call writing at 15,700 and then 15,800 while Put writing was seen at 15,600 and then 15,200 levels. Options data suggested a broader trading range between 15,500 and 15,800 levels.

Bank Nifty opened with a gap down and sharply moved downward to breach its 50 DMA. Banking stocks dragged the index lower and the bears had a complete grip over the rate-sensitive index. It closed near 34,400 level with a loss of around 670 points. It formed a bearish candle on the daily scale and is forming lower highs since last three sessions. Now, as long as it holds below 35,000 level, more weakness could be seen towards the next support in the 34,000-33,900 zone.

Nifty futures closed negative with a loss of 0.80 per cent at 15,626 level. Among specific stocks, the trade setup looked bullish in ACC,

, Ambuja Cement, Berger Paint, , , Havells, Mindtree, HUL, Grasim and PFC but weak in Indigo, PEL, IndusInd Bank, PVR, Hindalco, ICICI Pru, Jindal Steel, Tata Power, Chola Finance, TVS Motor, Federal Bank, RBL Bank, , M&M Financial, ZEEL, Cipla, IGL, Exide Industries, and .

(Chandan Taparia is a 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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