Stock Market

F O: Vix falling, but Nifty likely to remain rangebound below 10,650

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By Chandan TapariaThe Nifty50 opened in the negative on Thursday and continued to show weakness for the third consecutive session in a row, falling towards the 10,500 mark.

It has been making lower highs and lower lows for three consecutive sessions and has corrected by around 250 points from its recent swing high of 10,774. The 50-pack has been trading below its 50-DEMA and the crucial juncture at 10,650, which is also a trendline connecting the recent swing lows of 10,020, 10,105, 10,440 and 10,650 levels.

As long as the index remains below 10,650, it is likely to remain in a rangebound mode with limited upside, while on the downside, the next major support exists at 10,450 level. On the options front, maximum Put open interest was at 10,000 followed by 10,500, while maximum Call OI was at 10,700 followed by 11,000 level.

There was Call writing at 10,600 followed by 10,700 whereas Put unwinding was seen at all immediate strike prices. India VIX fell 2.04 per cent to 19.16 level.

Volatility has to cool down below 17-16 levels to get the next leg of smooth upside rally; else volatile up and down swings could continue in the market. Bank Nifty failed to cross previous day’s high and corrected towards 25,950 level after its initial rangebound move in the market.

It formed a bearish candle on the daily chart and a Bearish Belt Hold candle on the weekly scale.

The index broke its immediate support at 26,100 and remained under pressure in line with the broader market.

Now, it has next support in the 25,800-25,750 zone, while on the upside hurdles are seen in the 26,250-26,333 zone. Nifty futures closed in the negative at 10,518 with a loss of 0.98 per cent.

Long buildup was seen in Dalmia Bharat, NHPC, Capital First and IDFC Bank while shorts were seen in Hindalco, Amar Raja Battery, ACC and Bata India. (Chandan Taparia is Technical Derivative Analyst at MOFSL.

Investors are advised to consult financial advisers before taking an investment call based on these observations.)




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Category: Stock Market


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