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Home STOCKS market analysis: F&O: Nifty consolidative, falling volatility gives the only solace

market analysis: F&O: Nifty consolidative, falling volatility gives the only solace

By Chandan Taparia
Nifty opened constructive on Thursday but failed to hold over 11,350 degree and remained consolidative for most aspect of the session. All through the working day, the index fell to 11,270 level, but managed to get well from the lows to settle on flat note close to the 11,300 level. It shaped a Tiny Bearish candle, as followup purchasing was lacking in close proximity to the 11,350 amount. At the exact time, declines obtained bought into. Now, Nifty has to hold earlier mentioned 11,200 amount to witness an up-shift in the direction of 11,400 and 11,500 level and increased though on the draw back support exists at 11,200 and then 11,150 concentrations.
India VIX fell 1.31 for every cent to 20.56 level. Volatility has been falling given that final 8 periods and a gradual decrease in VIX implies the bulls are making use of each decrease as a getting prospect even however the general trend stays bullish. Highest Put open interest stood at 11,000 followed by 10,500 concentrations, whilst most Call OI was at 11,500 adopted by 12,000 levels. Minor Call producing was viewed at strike price ranges 11,500 and 11,700 although there was Put crafting at 10,600 and 11,000 stages. Options information instructed an immediate trading range in between 11,100 and 11,500 levels for the coming number of days.
Bank Nifty opened constructive but unsuccessful to hold above 22,400 amount and drifted towards the 22,150 mark. It remained consolidated for most section of the session as selling promoting strain emerged at bounce and shaped a bearish candle identical to a Dim Cloud cover on the day-to-day scale. Technical indicators are nevertheless holding their bullish crossover, but involve followup buying to affirm the following momentum. Else this bounce could acquire a pause for a consolidative move. Now the index has to keep higher than 22,000 amount to witness an up-transfer in direction of 22,500 and then 22,750 stages, while on the draw back speedy support is viewed at 21,750 and then 21,500 concentrations.
Nifty futures closed flat to constructive at 11,325 with a marginal attain of .06 for every cent. The trade setup was good in Ashok Leyland, BHEL, Tata Ability, PVR, Tata Motors, L&T, Tata Customer, Hindalco, BEL, Motherson Sumi, Titan, Godrej Customers, TVS Motor, Voltas, Jubilant Foodworks, Hero Motoco, and Balkrishna Industries but weak in ACC, Biocon, Shree Cement and Kotak Bank.
(Chandan Taparia is Technological & By-product Analyst at MOFSL. Traders are encouraged to seek advice from fiscal advisers in advance of taking an investment calls centered on these observations)

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