Home Market F&O: Market sees brisk Call unwinding; Vix declines 5.80%

F&O: Market sees brisk Call unwinding; Vix declines 5.80%


By Chandan Taparia

The Nifty50 index opened in the positive on Wednesday and formed an Inside Bar and also a Bullish Harami candle on daily scale, which indicated that the bulls were not loosening their grip and decline again bought into.

The index has taken support near its rising channel by connecting recent swing lows of 10,417 and 10,550. Now, it has to hold above 10,770 to witness an upward move towards 10,835 and then 10,888 levels, while on the downside, supports are seen at 10,720 and then 10,700 levels. The index got stuck in a range from last 10 sessions between 10,700 and 10,900 levels and requires a decisive breakout to commence the next leg of rally, else the bulls and the bears are likely to drag the market to their respective sides.

On the options front, maximum Put open interest stood at 10,700 followed by 10,600 while maximum Call OI was at 11,000 followed by 10,800. Fresh Put writing was seen at strike prices 10,700 and 10,800 while Call unwinding was seen at all immediate strike prices. Options data suggested a broader trading range between 10,700 and 10,850 levels.

India VIX fell 5.80 per cent to 12.17 level.

Bank Nifty opened in the positive and erased the losses of last three sessions and closed above the immediate hurdle at 26,500. It has negated the formation of lower highs and lower lows of last four sessions and formed a strong bullish candle after witnessing weakness for last four sessions. Now it has to hold above 26,500 to witness an upward move towards 26,750, while on the downside, supports are seen at 26,250 and then 26,100 levels.

Nifty futures closed in the negative with a gain of 0.64 per cent at 10,788. Long buildup was seen in NIIT Tech, Bata India, Just Dial, Tata Elxsi, ZEEL and HDFC while shorts were seen in Sun TV, Coal India, Ambuja Cement, BEL, IOC and HCL Tech.

(Chandan Taparia is Technical & Derivative Analyst at Motilal Oswal Securities. Investors are advised to consult financial advisers before taking an investment calls based on these observations)

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