India VIX was down 2.20% from 15.44 to 15.10 levels. Volatility is overall at higher zones and giving swings to the market in either direction.
Option data suggests an immediate trading range between 16,800 and 17,200 zones.
On the hourly charts, Nifty is trading between 16,910 and 16,970, where the 61.82% and 78.6% Fibonacci retracement levels of the previous rise from 16,828 – 17,207 are placed.
Volatility is expected to be high tomorrow due to the expiry of weekly and monthly derivatives.
What should traders do? Here’s what analysts said:
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
From the last three days, Nifty is taking support near 16,900 and resistance near the 17,100 level. For the index, 16,900 would act as a key support level and on further uptick it could retest the level of 17,050-17,100. On the flip side, a fresh sell-off is possible only after the dismissal of 16,900 and below the same the index could slip till 16,820-16,800.
Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
Both price and momentum indicators suggest positive price action over the next few trading sessions. On the upside, initial targets are placed at 17,200 and above that it can extend higher to 17,450 – 17,500. The crucial support zone is placed at 16,910 – 16,870.
Ajit Mishra, VP – Technical Research, Religare Broking
We expect volatility to remain high due to the scheduled expiry of March month derivatives contracts. On the index front, participants have been trying to defend 16,900 in Nifty for the last three sessions and its breakdown may trigger a sharp reaction on the downside. Needless to say, the recent sell-off in the broader indices may deteriorate further. We thus reiterate our view to limit trade and maintain positions on both sides.
Rahul Ghose, Founder & CEO, Hedged
Traders are going into tomorrow’s expiry with a bearish-to-neutral view. The shorting of calls was coupled with unwinding in the 17,000 PE as well for tomorrow’s expiry. Taking this data into account, traders should look to initiate short straddles with a bought put option as an offset unit to take advantage of the current outlook of OI for this expiry. Bank Nifty has its highest OI at the 40,000 level indicating tomorrow’s expiry may close below 40,000.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)