F&O: Nifty50’s slippage below key hurdle, VIX spike signal weakness

F&O: Nifty50's slippage below key hurdle, VIX spike signal weakness

Nifty opened negative on Monday and remained under pressure for the entire day, as every small bounce got sold into. The index has failed the setup of higher lows of last two sessions and broken its 50 DEMA. Weakness surfaced across the street and finally the index ended the day with a loss of more than 250 points. Now, it needs to cross and hold above 14,675 level to witness a bounce towards 14,800 and 14,900 levels while on the downside immediate support exists at 14,450 and then 14,350 levels.

India VIX rose 8.69% from 20.66 to 22.45 level. VIX has to cool down below 20 level for the bullish grip to continue and the market move to get smoother.

On the options front, maximum Put Open Interest was seen at 14,000 level followed by 14,500, while maximum Call OI is at 15,000 followed by 15,300 level. There was Call writing at 14,700 and then 14,600, while marginal Put writing was seen at 14,300 and then 14,350 levels. Options data suggested a lower trading range between 14,350 and 14,800 levels.

Bank Nifty opened with a gap down and continued to show weakness till the end of session towards 33,200 level. It has been underperforming the broader index for the past few sessions but facing a hurdle at its 50 DEMA since last four trading sessions. It has formed a bearish candle on the daily scale and closed the session with a loss of around 900 points. Now it needs to cross 33,500 level to witness a bounce towards 34,000 and 34,500 levels, while on the downside support exists at 33,000 and 32,500 levels.

Nifty futures closed negative with a loss of 1.79% at 14,568 level. Among specidic stock, the trade setup looked bullish in Asian Paint,

, Aurobindo Pharma, Marico, Pidilite Industries and Tata Consumers but weak in Motherson Sumi, RBL Bank, Tata Steel, , PNB, M&M Finance, , Hindalco, Exide India, BEL, , PVR, and Bharat Forge.

(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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