F&O: Nifty negates formation of higher lows of last 3 sessions; VIX rises sharply
Nifty opened with a gap up above the 15,300 level on Friday, but selling pressure across the board pulled the index to 14,950 level. The index cascaded throughout the session while the second half saw sharp decline. However, some support-based recovery was seen in the last hour of trade and Nifty closed near the 15,000 mark with a loss of around 143 points.
The index formed a strong bearish candle on the daily chart and a Doji candle on the weekly scale. Nifty negated the formation of higher lows of last three sessions and wiped out the bullish momentum. Now, it has to decisively hold above 15,000 level to witness a bounce towards 15,200 and 15,300 levels, while on the downside immediate support exists at 14,900 and then 14,800 levels.
India VIX moved up 4.61% from 20.74 to 21.70 level. A cool down in VIX below the 21-20 zone is required for the bullish grip to continue and smoothen the market move.
On the options front, maximum Put open interest stood at 14,000 level followed by 14,500, while maximum Call OI stood at 16,000 followed by 15,500 levels. Call writing was seen at strike prices 15,500 and 15,300 while there was Put writing at 15,000 and then 14,700. Options data suggested a wider trading range between 14,500 and 15,500 levels, while the immediate range was seen between 14,800 and 15,300 levels.
Bank Nifty opened with a gap up, but failed to cross the 36,500 mark and drifted lower. It stooped below 35,200 level and settled the day with a loss of around 440 points. It formed a bearish candle on the daily chart and a Doji on the weekly scale, which indicated sustained selling pressure seen at higher levels even after a recovery from the support levels. Now, it has to hold above 35,500 level to witness a bounce towards 36,000 and 36,500 levels, while on the downside, support exists at 35,000 and then 34,750 levels.
Nifty futures closed negative at 15030 level with a loss of 1.18%. Among specific stocks, the trade setup looked bullish in Tata Power, PFC, Apollo Hospital, Tata Chemicals, PowerGrid and Escorts but weakness in ICICI Prudential, Bank of Baroda, TVS Motor, Canara Bank, Motherson Sumi, ACC, Maruti, SBI, RIL, IndusInd Bank, Petronet LNG, Marico and Jubilant Foodworks.
(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
