India VIX rose 1.58 per cent from 15.84 to 16.10 level. A small rise in volatility indicated volatile swing in the market at higher levels, but the overall comparative lower VIX reading suggests any small decline could be bought and the bulls are holding a tight grip on the market. Now VIX needs to cool down below the 15-14 zone to ensure that the smooth ride continues.
On the options front, maximum Put Open Interest was seen at the 17,500 level followed by 17,000, while maximum Call OI stood at 18,000 followed by 18,500 levels. Minor Call writing was seen at 18,200 and then 18,100 levels, while there was Put writing at 18,000 level. Options data suggested a broader trading range between 17,700 and 18,500 levels while the immediate trading range exists between 17,850 and 18,300 levels.
Bank Nifty opened with a gap up and moved towards its all-time high of 38,779 level in the initial tick. The session proceeded with some consolidation and closed with a gain of around 110 points. The index formed a small bearish candle on the daily scale with a long lower shadow, indicating that buying emerged but only on declines. Bank Nifty has been forming higher lows since the last eight sessions in a row. Now it has to hold above 38,500 level to witness a bounce towards 38,800 and 39,000 levels, while on the downside, major support is seen at 38,350 and 38,100 levels.
Nifty futures closed positive with a gain of 0.96 per cent at 18,175 level. Among specific stocks, the trade setup looked bullish in Tata Chemicals, Tata Power, India Mart, Jubilant FoodWorks, Federal Bank, M&M, ZEEL, ITC, Tata Consumer Products, Jindal Steel & Power, Motherson Sumi, Shriram Transport Finance Company, PowerGrid, LTI, Grasim, VEDL, LT, Hindalco and Sun Pharma but weak in Maruti, ONGC, Biocon, SBI Life, Coal India and ICICI Lombard.
(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
