INSUBCONTINENT EXCLUSIVE:
By Chandan TapariaNSE Nifty started the session on a negative note on the back of sharp selloff in global bourses
The index breached the 8,000 mark in initial trades and hit December 2016 lows (demonetisation correction)
On fag-end selling, the index concluded below the 8,300 level and formed a small green bodied candle on daily chart
At this juncture, Nifty is sustaining below Rising Trend line breakdown level, 100-EMA, on the monthly chart, and thus we may see further
As of now, there is no sign of reversal, and thus ongoing fall may accelerate towards 7,900 and then 7,500
On the flipside, resistance is shifting lower to 8,600 and then 9,200.
Till the time Nifty doesn't close above 8,600 level, the bears will
have an upper hand, and bounces can be used as a shorting opportunity
Considering the overall scenario, traders should not look for bottom fishing as the market is in strong bear grip and we are not seeing any
sign of meaningful stability in the market.
On the options front, maximum Call open interest was at 12,000 and then 10,000 while Maximum Put
OI was at 8,500 then 9,000 strike
Option OI data was scattered and shifted at various strikes as many Put writers got trapped in recent market fall and even unwinding
pressure could keep the street under the pressure
Call writing was seen at 10,000 and 9,500 strike, while Put Unwinding was seen at all the immediate strikes with minor Put writing at 8,000
Option data indicates a shift in wider trading range in between 7,800 and 9,000 levels.
India VIX closed with a surge of 12.88 per cent to
Higher VIX beyond 60 zone suggests that volatile swings could continue in the market
Volatility has to cool down from current multiple years high zones then only stability and smooth ride could be back in the Indian
market.
It was nothing less than a rollercoaster for Bank Nifty, as it corrected sharply below 18,700 in the initial trades and then
Eventually, it concluded the session a tad above 20,000, and formed a small body candle with decent shadows on both the sides on the daily
Banking index closed below its major support of 20,500-20,600 zone on the monthly chart, which is the confluence zone of the previous swing
high and 61.80% retracement level of its previous rally from 13,407 to 32,613
The RSI oscillator is giving breakdown on a monthly scale
extension in the ongoing fall towards 18,000-17,500 zone.
Nifty futures closed with a loss of 2.71 per cent at 8,205
We witnessed some long buildup in stocks such as ITC, Bharti Airtel, Kotak Bank and Divis Lab while shorts in Ashokley, Coal India, Bharat
Forge, Bharti Infratel and Shree Cement.
(Chandan Taparia is Technical - Derivative Analyst at MOFSL
Investors are advised to consult financial advisers before taking an investment calls based on these observations)