F&O: Volatility is not cooling down, no relief yet for the bulls
By Chandan Taparia
The Nifty50 index opened in the negative and drifted toward the 10,550 level in Thursday’s trade, as it broke its 50% retracement of 10,850 and 61.80% retracement of 10,650 of the entire upward swing from 9,952 to 11,760 levels.
The index also slipped below its rising trend line on the weekly scale by connecting the swing lows of 7,893, 9,952 and 10,850 levels. The index witnessed sustained selling pressure for the entire session and formed a Bearish Belt Hold candle on the daily scale.
It also breached its 200-day EMA. As long as it holds below 10,850, the index may continue its weakness towards 10,500 and then 10,350 levels, while on the upside, the immediate hurdle is seen at 10,750.
On the options front, maximum Put open interest was at 10,500 followed by 10,700 while maximum Call OI was at 11,000 followed by 11,200. There was significant Call writing at 11,000 followed by 10,900 while Put writing was seen at 10,500 and 10,600 levels. The option band signified a shift in the lower trading range with its immediate hurdle at 10,850.
India VIX moved up 4.39 per cent to 18.91. Volatility is not cooling down, which is not giving relief to the bulls and suggests a tighter bear grip in the market.
Bank Nifty opened in the negative, but managed to respect its intraday support at 24,500 and witnessed some recovery from the lower levels. The index formed a Hammer candle on the daily scale, but the major trend was negative on the weekly scale. It has been forming lower top and lower bottom from last five weeks and every bounce is being sold into.
Bank Nifty breached its crucial support trend line formed by connecting the swing lows of 21,386, 23,605 and 24,678 levels. It finally broke its consolidation range of past six trading sessions. As long as it remains below 25,250, overall weakness could drag Nifty towards 24,500 and then 24,250 levels, while a medium-term hurdle is seen in the 25,500-25,650 zone.
Nifty futures closed in the negative with a loss of 2.70 per cent at 10,599. Longs were seen in ICICI Bank, L&T, Indigo and Bharti Infratel while shorts were seen in RIL, Eicher Motors, Hero MotoCorp and TCS.
(Chandan Taparia is Technical & Derivative Analyst at Motilal Oswal Securities. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
The Nifty50 index opened in the negative and drifted toward the 10,550 level in Thursday’s trade, as it broke its 50% retracement of 10,850 and 61.80% retracement of 10,650 of the entire upward swing from 9,952 to 11,760 levels.
The index also slipped below its rising trend line on the weekly scale by connecting the swing lows of 7,893, 9,952 and 10,850 levels. The index witnessed sustained selling pressure for the entire session and formed a Bearish Belt Hold candle on the daily scale.
It also breached its 200-day EMA. As long as it holds below 10,850, the index may continue its weakness towards 10,500 and then 10,350 levels, while on the upside, the immediate hurdle is seen at 10,750.
On the options front, maximum Put open interest was at 10,500 followed by 10,700 while maximum Call OI was at 11,000 followed by 11,200. There was significant Call writing at 11,000 followed by 10,900 while Put writing was seen at 10,500 and 10,600 levels. The option band signified a shift in the lower trading range with its immediate hurdle at 10,850.
India VIX moved up 4.39 per cent to 18.91. Volatility is not cooling down, which is not giving relief to the bulls and suggests a tighter bear grip in the market.
Bank Nifty opened in the negative, but managed to respect its intraday support at 24,500 and witnessed some recovery from the lower levels. The index formed a Hammer candle on the daily scale, but the major trend was negative on the weekly scale. It has been forming lower top and lower bottom from last five weeks and every bounce is being sold into.
Bank Nifty breached its crucial support trend line formed by connecting the swing lows of 21,386, 23,605 and 24,678 levels. It finally broke its consolidation range of past six trading sessions. As long as it remains below 25,250, overall weakness could drag Nifty towards 24,500 and then 24,250 levels, while a medium-term hurdle is seen in the 25,500-25,650 zone.
Nifty futures closed in the negative with a loss of 2.70 per cent at 10,599. Longs were seen in ICICI Bank, L&T, Indigo and Bharti Infratel while shorts were seen in RIL, Eicher Motors, Hero MotoCorp and TCS.
(Chandan Taparia is Technical & Derivative Analyst at Motilal Oswal Securities. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
