India VIX was up by 4.07% from 12.60 to 13.11 levels. Volatility has been rising from the last three sessions and causing swings in the market. Option data suggests an immediate trading range between 18,150 and 18,400 zones.
What should traders do? Here’s what analysts said:
Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
Price and momentum indicators are currently not in sync with each other, which can lead to a consolidation in the near term. Overall, we still believe that Nifty is in a consolidation mode and the range of consolidation is likely to be 18000 – 18400. In terms of levels, 18420 – 18450 shall act as the immediate hurdle while 18200 – 18150 is the crucial support zone to watch out for on the downside.
Rahul Ghose, Founder & CEO, Hedged
The expiry data for tomorrow is suggesting that Bank Nifty has a strong ceiling at the 44,000 level. Going into the expiry for the Nifty Index, we see short straddles created at the 18,300 level. A prudent strategy to play for tomorrow would be to short the 18,300 short straddle when the index opens between 18,260 and 18,290 and buy a PE of 18,250 to take care of any downside risk. It is important to make sure that we get at least 80 points of credit on the short straddle and less than 20 points of debit on the bought PE side. This will ensure that we stay profitable as long as the market stays below 18360 for the expiry day.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
For the traders now, 18350/62000 would act as an immediate resistance zone. Below the same, the weak sentiment is likely to continue. Below 18350/62000, the index could slip till 18220-18200/61700-61600. On the flip side, above 18350/62000, the index could retest the level of 18400-18425/62200-62350.
Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities
The index is currently facing significant resistance at the level of 18400, which has proven to be a challenging barrier to overcome. The ongoing battle between bulls and bears has resulted in the index trading within a consolidated range between 18200 and 18400 levels. However, a break above or below this range has the potential to trigger trending directional moves in the market. Traders and investors should closely monitor the index for a potential breakout or breakdown, as it may indicate a shift in market sentiment and the beginning of a new trend.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)