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Nifty | F&O: Bulls and bears fight tug of war; spike in VIX adds to worries

Nifty | F&O: Bulls and bears fight tug of war; spike in VIX adds to worries

F&O: Bulls and bears fight tug of war; spike in VIX adds to worries

Nifty on Wednesday opened with a gap down on weak global cues, but managed to hold previous day’s low and bounced to the key hurdle at the 17,777 level. Despite dullness in the initial half, the index recovered well and finally closed above the 17,700 level with a loss of 40 points. Nifty formed a small-bodied bullish candle on the daily scale with longer shadows on either side, which indicated a tug of war between the bulls and the bears. Now it has to hold above the 17,700 level for a bounce towards 17,850 and 18,000 levels whereas support was seen at 17,600-17,580 levels.

India VIX moved up 1.6 per cent from 18.54 to 18.83 level. A spurt in India VIX is causing volatile swings and now it has to cool down below the 15-14 zone to ensure a smooth ride for the market.

On the options front, maximum Put Open Interest stood at 17,000 and followed by 17,500 levels, while maximum Call OI was seen at 18,000 followed by 17,900 levels. There was Call writing at 18,000 and then 17,800 levels while there was Put writing at 17,600 and then 17,650 levels. Options data suggested a trading range between 17,600 and 17,900 levels.

Bank Nifty opened with a gap down and remained consolidative throughout the day. Select PSU banks gained strength and pulled the index towards the 37,900 level. It formed a bullish candle, but an Inside Bar on the daily timeframe chart. Now it has to continue to hold above the 37,700 level to witness a bounce towards 38,000 and 38,300 levels while on the downside major support is seen at 37,300 and 37,100 levels.

Nifty futures closed negative with a loss of 0.21 per cent at 17,710 level. Among specific stocks, the trade setup looked bullish in Tata Power, IEX, Coal India, NTPC, PowerGrid, BHEL, Sun Pharma, Godrej Properties, ABFRL, SBIN, LTTS, Tata Chemicals, Hindalco, Hindustan Petroleum Corporation, SRF, Torrent Power, REC Ltd, ONGC and Cipla but weak in Metropolis, Godrej Consumer Products, HDFC, UltraTech Cement, HUL and Voltas.

(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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