F&O: Lowest VIX level since Feb 2020, higher highs & lows hint at mega bull run

Nifty opened with a gap up and the bulls cheered the Street to help Nifty hit an all-time high of 15,469 mark on the first day of the June F&O series. The index took support near 15,400 level and yet again saw the highest daily close at 15,435 with gains of around 100 points. Technically, the index formed a small-bodied bullish candle on the daily scale and continued to form higher highs and lows for the sixth session. Now, it has to hold above the 15,300 zone to witness an upmove towards the lifetime highs of 15,500 and 15,650, while on the downside support exists at 15,250 and 15,150 levels.

India VIX fell 12.59% from 19.91 to 17.40 level. India VIX is at lowest level of last 65 weeks since February 2020 after its biggest single-day drop since November 25, 2020. A falling VIX is likely to extend the bullish market momentum towards new high territory.

Since it is beginning of new series, options data lay scattered at different strikes. On the options front, maximum Put open interest stood at 14,000 level followed by 14,500 strike while maximum Call OI stood at 16,000 followed by 15,500. Call writing was seen at strike prices 16,000 and 15,800 while there was Put writing at 15,000 and 14,500 levels. Options data suggested a broader trading range between 15,000 and 15,800 levels.

Bank Nifty opened with a gap up and touched a high of 35,436 level during the day, but couldn’t hold and witnessed volatility during the session. It saw the highest daily close of the last 49 sessions and settled with a marginal gain of around 50 points. It formed a bearish candle on the daily scale with a long lower shadow, but has been forming higher lows since last three sessions. Now, it has to hold above 35,000 level to witness an upmove towards 35,500 and 36,000 levels, while on the downside support exists at 34,750 and 34,500 levels.

Nifty futures closed positive with a gain of 0.59% at 15,477 level. Among specific stocks, the trade setup looked bullish in RIL, L&T Finance, Canara Bank, Grasim, ICICI Pru, Adani Ports, PFC, RBL Bank, M&M, IndiGo, REC, IDFC First Bank, Mindtree,

and McDowell but weak in , , BEL, Dr Reddy’s, and NTPC.

(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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