F&O: Nifty lacking followup buying at higher levels; VIX seeing a spike

Nifty opened flat to negative on Tuesday, but took support near the 15,800 level and headed towards its lifetime high territory. It missed its lifetime high of 15,915 level by just 1 point and witnessed a sharp drop in the last hour of the session towards 15,800 level.

It formed a Bearish Doji sort of candle with a long upper shadow on the daily scale, which indicates followup buying was missing at higher levels. Now, it has to hold above 15,800 level to witness an upmove towards 15,915 and 16,000 levels while on the downside support can be seen at 15,700 and 15,600 levels.

India VIX moved up 1.70% from 12.06 to 12.27 level. The fear gauge was hovering near its lowest levels of last 17 months. Lower volatility indicates a rangebound move, but at the same time every decline could be bought into.

On the options front, maximum Put Open Interest is at 15,500 level followed by 15,000 level, while maximum Call Open Interest stood at strike prices 16,000 and 16,500 levels. Minor Call writing was seen at 16,200 while there was Put writing at 15,500 and 15,600 levels. Options data suggested an immediate trading range between 15,600 and 16,000 levels.

Bank Nifty opened negative, but the bulls managed to pull the index towards 35,800 level. There was slight profit booking towards the fag end of the day, but the banking index outperformed the broader market and finally closed with a gain of more than 350 points. The index formed a bullish candle on the daily scale and saw the highest daily close in last 22 sessions. Now it has to hold above 35,500 level to move up towards 36,000 and 36,250 levels, while on the downside, support exists at 35,250 and 35,000 levels.

Nifty futures closed negative with the loss of 0.15% at 15,834 level. Among specific stocks, the trade setup looked bullish in Ramco Cement, Dr Lal Pathlabs, Godrej Consumers, Ambuja Cement,

, HDFC Bank, , IndusInd Bank, and Titan but weak in , Biocon, NMDC, , BHEL, TechM, SAIL, Glenmark, TCS, Lupin, HCL Tech and TVS Motor.

(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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