F&O: Nifty forms bearish candle on daily scale; VIX sees a spike

Nifty, Nifty50, Nifty F&O, India Vix, F&O, Options data

Nifty50 opened with a gap up on Friday and soared to a new all-time high level of 17,947, just a few points away from the landmark 18,000 mark. Some profit booking was seen at higher levels, but the market ended slightly below the opening level.

The index formed a bearish candle on the daily scale, and a bullish candle on the weekly scale. Nifty continued to form higher highs and lows since the last eight weeks. Now, it has to continue to hold above the 17,777 level for a bounce towards 18,000 level, whereas support was seen at 17,700 and 17,500 levels.

India VIX moved up by 2.45 per cent from 16.49 to 17 level. A spurt in India VIX in the last few sessions has triggered volatile swings and now it has to cool down below the 15-14 zone to continue the smooth ride of the market.

On the options front, maximum Put Open Interest was seen at the 17,000 level followed by the 17,500 level, while maximum Call OI stood at 18,000 followed by 18,500 level. There was Call writing at 18,500 and then 18,000 levels, while Put writing was seen at 17,900 and then 17,800 levels. Options data suggested a broader trading range between 17,500 and 18,000 levels.

Bank Nifty opened positive and crossed the 38,100 level in the initial tick and touched its previous record high level. However, it formed a bearish candle on the daily scale due to slight profit booking, but it has been forming higher lows from the last three sessions.

The index formed a bullish candle on the weekly scale and respected the lows of the past four weeks. Now, it has to continue to hold above the 37,750 level to witness a bounce towards 38,100 and 38,500 levels, while on the downside major support is seen at 37,500 and 37,350 levels.

Nifty futures closed positive with marginal gains of 0.09 per cent at 17,849 level. Among stocks, the trade setup looked bullish in Tata Chemicals, Asian Paint, LTI, M&M, Eicher Motor, Berger Paint, DLF, HCL Tech, Bharti Airtel, HDFC Bank, Grasim, Infosys and HDFC but weak in Apollo Hospital, Lalpath Labs, Tata Steel, Jindal Steel, Cummins Inds, Idfc First Bank, AU Bank, Bank Baroda, Can Bank, ACC, Siemens, SAIL, Ambuja Cement, Tata Consumer Products and PNB.

(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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