F&O: Easing VIX, Options data suggest Nifty may be heading for lifetime high

By Chandan Taparia

Nifty opened positive on Thursday above the immediate hurdle at 12,020 level and headed towards the 12,131 mark. It continued to trade positive to rangebound throughout the session and closed with a decent gain of more than 200 points. The index registered the highest daily close in 165 sessions since February 19, 2020, ending above the psychologically important 12,000 mark in cheerful mood.

The index formed a bullish candle and has been forming higher lows since last four sessions. Now, it has to hold above 12,020 level to witness a rise towards the 12,200 mark then head towards it lifetime high of 12,430 while on the downside medium-term support exists at 11,900 and then 11,777 levels.

India VIX fell 9.63 per cent from 23.20 to 20.96 levels. Volatility has cooled down significantly, nudging the bulls to ride the move towards an all-time high.

On the options front, maximum Put open interest stood at 11,500 level followed by 11,000, while maximum Call OI stood at 12,000 followed by 12,500 levels. Marginal Call writing was seen at strike prices 12,400 and 12,700 while there was Put writing at 12,000 and 11,500 levels. Options data suggested a wider trading range between 11,700 level and 12,200-12,400 zone.

Bank Nifty opened with a gap up and continued its northward journey towards the 26,375 marks. It has been making higher highs and lows for last four sessions even as support shifted higher gradually. The index formed a bullish candle with a lower shadow, which indicated that declines are being bought into and the momentum may continue. Now, the index has to hold above 26,000 level to witness a bounce towards 26,500 level and then the 26,800-27,000 zone while the immediate key support seen at 25,750 and then 25,500 level.

Nifty futures closed positive at 12,154 level with 1.95 per cent gain. The trade setup looked positive in SRF, Hindalco, SBI, Tata Steel, Bajaj Finance, BPCL, LIC Housing Finance, McDowell, Chola Finance, Shriram Transport, IGL, JSW Steel, Glenmark, Jubilant Foodworks, MGL, Tata Consumers, Titan, Grasim, Kotak Bank and Asian Paint but weak Godrej Consumers and Lupin.

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