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F&O: Complete bear dominance on D-St; Vix spike to limit upside


By Chandan Taparia

Nifty50 opened negative and witnessed sustained selling pressure throughout the entire trading session on Monday and drifted sharply towards the 11,583 level. It formed a Bearish Maru bozu Candle on the daily scale, which signalled complete dominance by the bears.

The index has negated the formation of higher highs and higher lows on the daily scale after four sessions and as long as it holds below the 11,666 level, it would extend the losses towards 11,550 and then 11,500 levels, while on the upside a hurdle is seen at 11,666.

On the options front, maximum Put open interest stood at 11,500 followed by 11,000 level, while maximum Call OI was at 11,700 followed by 12,000 level. Meaningful Call writing was seen at 11,700 followed by 11,800 level, while there was minor Put writing at 11,550. The option band signified a shift in the trading range between 11,500 and 11,750 levels.

India VIX moved up 5.76 per cent to 24.05 level. The sudden spike in VIX indicated limited upside with volatile swings.

Bank Nifty opened negative and witnessed sustained selling through the session and corrected more than 500 points. It formed a Bearish Belt Hold pattern on the daily scale. As long as it holds below 30,000 level, Bank Nifty can extend its losses towards 29,500 and then 29,250 levels, while on the upside, a hurdle is seen at 30,000 level.

Nifty futures closed negative at 11,615 level with a loss of 1.32 per cent. Long buildup was seen in DCB Bank, ICICI Prudential Life, Idea and TCS while shorts were seen in Jet Airways, Pidilite, Infratel and BPCL.

(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)

Source: Economic Times