India Vix Drops
India’s benchmark Nifty slipped into a range of 50 points today as India Vix dropped below 15. Profit booking was witnessed in the 11200 Call options for the 2d day in a raw. Today’s closing above 11050 is significantly different as Nifty has entered a no trade zone despite a drop in the market volatility. Going forward, Nifty might bounce back from Monday’s range low only if the Call options gamma is neutralized. The nearest upside target for the index is around 11128 approx.
Will The Bears Attack Next week?
Nifty witnessed the 2nd day of profit booking in call options today. The index has climbed 287 points in the last 3 sessions which pushed the call options gamma above its neutral range after adjusting theta decay. In today’s session India Vix dropped below 15 which helped normalize the options premium to a large extent. Although today’s closing is just marginally in favor of the buyers, the Call options gamma has to normalize on Monday to help the bulls hit back next week. Going forward, Nifty might take support around Monday’s range low. The nearest upside target for the index is around 11128 approx. On the other hand, if Nifty trades below Monday’s range low, it might trigger a spike in market volatility, the nearest downside target will be 10982 approx.
Observations In The Hourly Timeframe
In the hourly session, Spot Nifty has closed around 11035 approx. The index is likely to find resistance around Monday’s hourly range low. The nearest downside target for Nifty is around 10988 approx. On the other hand, if Nifty trades above Monday’s hourly range high, it might scale up to 11088 approx.
Bank Nifty Options Data