NIFTY "WHEN IN DOUBT WEAR RED"

Continuing downward trend, the market settled with over 2 % loss on Friday as coronavirus (Covid-19) cases showed no signs of abating. Global confirmed cases surpassed 1 million on Thursday with more than 52000 deaths. Back home, an ongoing 21- day lockdown has already brought the economy to a standstill. The Sensex ended at 27591, down 674 points, while the Nifty index ended at 8084, down 170 points.

WHAT IS VOLATILITY INDEX IN OPTION TRADING?

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We are making an attempt to explain VIX ,so that one can read and get the subject knowledge which would help one to trade in nifty accordingly.

What is Volatility exactly? Volatility is just a statistical term to measure the tendency of the market to fluctuate. Big fluctuations suggest fear, because they mean that investors are frantically changing their minds about what stocks are worth, in the face of great uncertainty. Smaller fluctuations suggest that investors are confident and they know what the stocks are worth.

Volatility Index: VIX is a measure of market's expectation of volatility over the near term. In simple words, Volatility Index (calculated as annualized volatility, denoted in percentage e.g. 20%) is a measure of the amount by which an underlying Index is expected to fluctuate based on the order book of the underlying index options.

VIX is the ticker symbol for the Chicago Board Options Exchange Volatility Index, a popular measure of the implied volatility of S&P 500 index options. It is commonly called the VIX, and is often referred to as the "fear index."

India VIX is a volatility index based on the Nifty 50 Index Option prices. From the best bid-ask prices of Nifty 50 Options contracts, a volatility figure (%) is calculated which indicates the expected market volatility over the next 30 calendar days. i.e. higher the India VIX values, higher is the expected volatility and vice-versa.

INDIA VIX:

Specifications: India VIX is a volatility index based on the Nifty 50 Index Option prices. From the best bid ask prices of near term Nifty 50 Options contracts (which are traded on the F&O segment of NSE), a volatility figure (%) is calculated which indicates the expected market volatility over the next 30 calendar days.

Calculation: Higher the implied volatility higher the India VIX value and vice versa. There are some differences between a price index, such as the Nifty 50 and India VIX. Nifty 50 is calculated based on the price movement of the underlying 50 stocks which comprises the index. India VIX is calculated based on the bid-offer prices of the near and mid month Nifty 50 Index Options. Nifty 50 Index is an absolute number, e.g. 4500, 5000 etc., whereas India VIX is a percentage value (e.g. 20%, 30% etc.). The factors which will be taken into account to calculate the index include the following:
1) Time to expiry of the options contracts of Nifty that are selected to calculate the index.
2) Interest rate: The NSE MIBOR rate is being considered as risk-free interest rate for the respective expiry months of the NIFTY option contracts.
3) A methodology called the forward index level is being used to select the contracts which will be used to calculate the index.
4) From these selected contracts, the best bid and ask spreads will be chosen.
5) Weightage is given to each of the options contracts that are chosen, as per the method adopted by the Chicago Board of options exchange (CBOE). The weightage of a single options contract is directly proportional to the average of best bid-ask spread of that option contract and inversely proportional to the option contract's strike price.
Significance: Whereas Nifty 50 signifies how the markets have moved directionally, India VIX indicates the expected near term volatility and how the volatility is changing from time to time. India VIX is a premier barometer of investor consensus of market volatility expressed through option pricing. VIX is a trademark of CBOE Incorporated and Standard and Poor's has given license to NSE, with permission from CBOE, to use this trademark in the name of India VIX and for purposes relating to India VIX.

INTERPRETATION:

The exact number given by VIX is what a statistician would call the "forecasted annualized standard deviation of returns." But don't let that mouthful put you off - it's actually quite simple. A VIX reading of 50 means that options prices are suggesting that, over the next year, stock prices are expected to fluctuate within a range of plus or minus 50%. A VIX reading of 20 would mean expectations that the market will fluctuate less, staying within a range of plus or minus 20%.

In most cases, a high VIX reflects increased investor fear or uncertainty and a low VIX suggests complacency or less stressful times. Historically, this pattern in the relationship between the VIX and the behavior of the stock market has repeated itself in bull and bear cycles. During periods of market turmoil, the VIX spikes higher, largely reflecting the panic demand for puts as the hedge against further decline in stock portfolios. During bullish periods there is less fear and therefore less need for portfolio managers to purchase puts.

By measuring investor fear levels tick by tick and day by day, the VIX, like many emotional gauges (e.g. put/call ratio), can be used as a contrary opinion tool in attempting to pinpoint market tops and bottoms on a medium-term basis. There are two ways to use the VIX in this manner. The first is to look at the actual level of the VIX to determine its stock-market implications. Another approach involves looking at ratio comparing the current level to the long-term moving average of the VIX.

BOTTOM- LINE:

The VIX is a contrarian indicator that not only helps investors look for tops, bottoms and lulls in the trend but allows them to get an idea of large market players' sentiment. This is not only helpful when preparing for trend changes but also when investors are determining which option hedging strategy is best for their portfolio. A point to remember is that, even though bench-marking the past is a solid way to determine the future, nothing is set in stone.

NIFTY OUTLOOK & OPTION CALL PUT TIPS FOR 3 APRIL 2020

The see-saw battle between the bears and the bulls continued on Dalal Street with the former dominating Wednesday’s session amid a rise in coronavirus cases in India. Worries surrounding a sharp drop in GDP growth rate also hit investor sentiment on Dalal Street. India has reported a sharp rise in new coronavirus cases in the last couple of days, indicating a community transmission. The country has reported nearly 1,400 confirmed cases of Covid-19 including 35 deaths and 123 discharged patients. The Sensex tanked 1203 points to 28265 & Nifty dropped 344 points to 8254.

NIFTY OUTLOOK & OPTION CALL PUT TIPS FOR 1 APRIL 2020

It was a day for bulls. Stock market bulls marched on Dalal Street with heads held high on the last trading day of fiscal year FY20 as relatively better factory output data from China supported the investor sentiment. Some support also came from the report that the government has put off implementation of the uniform stamp duty on transfer of capital market instruments to July 1, 2020. sensex today closed 1028 points higher at 29468, while Nifty rose  316 points to close at 8597.

MANIC MONDAY NIFTY BELOW 8300 MARK

Market indices were not having a good start of the week. Sensex tanks over 1000  points to close at 28440 & Nifty gone below 8300-mark to close the day at 8281. bears ran riot with coronavirus cases rising in India and abroad, taking lives and forcing businesses to shut down. Along with that a ceaseless dumping of stocks by the foreign investors is also weighing on investor sentiments.

NIFTY WEEKLY OUTLOOK & OPTION CALL PUT TIPS FOR 30 MARCH 3 APRIL TO 2020

WEEKLY RESISTANCE FOR NIFTY: 9200, 9500,10000
PIVOT POINT: 8500

WEEKLY SUPPORT FOR NIFTY:  8300, 8100, 7800

WEEKLY CHART FOR NIFTY

DAILY RESISTANCE FOR NIFTY: 8900, 9000, 9100
PIVOT POINT: 8550

DAILY SUPPORT FOR NIFTY:  8300, 8200, 8100

DAILY CHART FOR NIFTY

This is clearly one of the worst phases the whole world is undergoing at present. Not only in terms of financials or economies but also in terms of health crisis. This uncertainty due to coronavirus pandemic is weighing down heavily on markets across the globe and it was yet another day of carnage for Indian markets. We opened the week significantly lower and after initial trades locked into a lower circuit for the second time in last 7 sessions. Unlike the previous circuit day, yesterday we didn’t even see a mild recovery; in fact the selling augmented to conclude yet another terrible day with a cut of 13%. Worldwide the trading screen was positive early in the morning on Tuesday  after US FED announced some measures to support the US economy in such difficult times. Hence, we had a good bump up at the opening after Monday’s mayhem. But surprisingly, we lost all the sheen in initial trades to slide tad below Monday’s low. Finally after an hour, market stabilised and started moving. Despite US markets posting a colossal overnight rally, we started the wednesday marginally in the red, which was mainly a hangover of PM Modi’s announcement on country lockdown for 21 days. After initial hiccups, we finally joined hands with our global peers and a strong buying across the board thereafter pushed Nifty significantly higher to reclaim the 8300 mark. Wednesday’s colossal rally was followed by a positive start for the thursday, despite some sluggishness in the global peers. After some initial consolidation, our markets picked up strong momentum to post positive close for the third consecutive day. Despite some intraday declines, the Nifty managed to add yet another three percent gains to Wednesday’s relief move and concluded the terrifying March series with nearly 15% recovery from lows.

NIFTY: A STRONG SUPPORT WILL BE @ 9500; STRONG RESISTANCE LEVEL SEEN @7500

Let see how things shape up on the global front now. If we see the relief move getting extended in global markets, we would see some extension of this week move in our markets. For the coming session, 8000-7500 remains to be a key support; whereas on the higher side, 9000-9500 is the level to watch out for. If Nifty has to continue some relief move, the Nifty needs to surpass this hurdle convincingly to head towards 10000.

TECHNICALLY SPEAKING.

Since Tuesday morning, almost all world markets were looking jubilant and despite we closing in the green, the reaction from our markets is not as similar as the rest of the world. Nevertheless, we have managed to defend 7500 and have shown some signs of relief on tuesday. markets are hinting towards a possible rebound and it was very much overdue also after recent relentless fall. All markets across the globe were deeply oversold and hence, a decent bounce back was on cards. For the day, we were observing 8000 as a crucial hurdle. The moment index surpassed and stayed for few minutes, we saw strong bout of short covering thereafter to head towards the mentioned zone of 8200 - 8400. Now market has given the most awaited rebound, but traders should not get carried away by this. It may extend further also, but the uncertainty with respect to coronavirus is still looming over. Till the time it does not subside considerably, we should avoid aggressive bets in the market. At present, it’s advisable to take one step at a time and momentum traders should look to book profits on a regular basis. Nifty precisely met the levels of 8200-8400-8600 one after another. Now technically speaking, the Nifty has displayed first sign of strength i.e. a convincing close above ‘5 day EMA’ after a month. In addition, the ‘RSI-Smoothened’ on daily chart has confirmed a positive crossover in deep oversold territory. Considering all this, we may see this up move getting extended from hereon. Going by technical observations if Nifty manages to stay beyond 8700- 8800 levels then we may see extension of the rally towards 9500-10000. Obviously we need not forget that current situation is different due to pandemic across the globe and hence, a possibility of whipsaws cannot be rules out. If above mentioned technical set up has to work well, things with respect to coronavirus should not aggravate in coming days.

RECOVERY IN NIFTY CLOSED ABOVE 8600

Market closed in the green for the third straight session on Thursday as the Nifty ended the March series above 8600 level. The Sensex surged 1,411  points to 29946 while the Nifty was up 323 points at 8641 at close.  FM came out with some announcements in terms of a relief package, which was majorly attributed to poor people and farmers who are facing major problems during lockdown, but there was no major thing, which can boost market sentiment while the market has already rallied significantly in the last 2-3 days in anticipation of some kind of announcements.  The key takeaway is that it (FM’s relief package) will provide a solid support to rural and semi-rural economy due to the high amount of benefit in terms of food, cash in hand and job safety. Regarding the market, it will provide safety to defensive stocks such as staple industries, but does not provide any relief to corporates like banks, hospitality and others. It seems that the majority of the benefits announced is factored in the market given more than 15 % bounce from the recent low.

NIFTY TRIED TO BE ON TRACK ABOVE 8300

Bulls tried to be back in ground. markets soared more than 7% on as buying strengthened in the second half of the session, as India began a 21-day countrywide lockdown to curb the spread of the deadly coronavirus pandemic.The Sensex index jumped as much as 2116 points to touch 28790 in afternoon deals, and the Nifty climbed to a high of 8376, up 575 points from the previous close. Buying in energy and financial sectors pushed the markets higher, but high volatility cannot be ruled out in the near term amid the rising number of COVID-19 cases.

NIFTY OUTLOOK BEFORE THE EXPIRY MARCH 25,2020

A relief day for the market participant nifty settled the day above 7800 mark. A volatile trading session ended on marginally positive note, but failed to retain the sharp recovery of morning session despite Finance Minister Nirmala Sitharaman announced several relief measures for the industry and ended in the green.

NIFTY IS FALLING LIKE DECK OF CARDS

Coronavirus fear continue on the street as indices were down by 13% biggest single day fall. Indian equity markets failed to show any recovery after trading resumed post the first circuit limit. Both Sensex and the Nifty ended with their worst ever one-day decline.nifty closed 230 points down at 8967 & sensex ended 811 points down at 30579. This was on back of the government imposing lockdown in 75 districts all over the country to mitigate the threat of rising coronavirus cases. Overseas, trend was majorly bearish amid rising number of COVID-19 cases, creating liquidity crisis, supply disruptions and chances of a prolonged global recession.

LOWER CIRCUIT ; SENSEX BELOW 27000 NIFTY AT 7900

The market was down 2,740 points, or 9.24 at 27140 levels. The index plunged to as low as 27197 level in opening deals before bouncing back slightly. The Nifty index fell below the 8000-mark, down 790 points, or 9.04%.

Indian equity markets resumed sell-off on Monday, in line with their Asian peers, as the governments the world over struggle to contain the fast spreading novel coronavirus (COVID-19). In India, various state governments announced lockdown in nearly 80 districts across the country as the total number of confirmed Covid-19 cases inched towards 400. 

NIFTY WEEKLY OUTLOOK & OPTION CALL PUT TIPS FOR 23 MARCH TO 27 MARCH 2020

WEEKLY RESISTANCE FOR NIFTY: 9200, 9500,10000

 PIVOT POINT: 8500

WEEKLY SUPPORT FOR NIFTY:  8300, 8100, 7800

WEEKLY CHART FOR NIFTY

DAILY RESISTANCE FOR NIFTY: 8900, 9000, 9100
PIVOT POINT: 8550

DAILY SUPPORT FOR NIFTY:  8300, 8200, 8100

DAILY CHART FOR NIFTY

Whatever we have witnessed over the past few days, it’s clearly once in a lifetime phenomenon. Market has taught everyone, we should never underestimate the ‘Uncertainty’. Every day, market is bleeding as if there is no tomorrow; because people are clue less and don’t know how and when we are going to come out of this. After Friday’s recovery, many must have thought the short term bottom is made but this hope did not last too long. Within three subsequent sessions, Friday’s low was not only tested but also broken quite convincingly. The indices started the week with a huge gap down opening and resumed the downtrend to end with a cut of over 7%. Looking at the positive U.S. Futures market, our markets started trading marginally positive on Tuesday. However, post consolidating in a range, the broader markets again witnessed selling pressure in the later half and ended the session with a cut of two and a half percent. Wednesday our markets kept sinking throughout the day to conclude below 8500 with yet another severe cut of over 5%.  The indices again started trading for the day with a significant gap down opening of about 500 points in Thursday session to breach the 8000 mark. The index remained under pressure till noon but then a sudden bout of recovery in the later half led to an up move and the index recovered all the losses to trade with gains of about 100 points. However, we again saw some selling pressure in the last half an hour to end this volatile day with a loss of over 200 points at 8263. On account of strong global cues Post-Wall Street rebound, the Indian Indices surged around 5.75 per cent on World Happiness Day. The Sensex shot up 1627 points and closed at 29915 levels while Nifty soared 482 points and closed at 8745 levels. This rise in the Indian indices was mainly due to the fresh buying in energy, oil and gas and metal stocks.

NIFTY BELOW 9000 MARK; MARKET OUTLOOK FOR 20 MARCH 2020

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Nifty continue to bleed in Thursday’s session as well due to worries over a case of community spread of the virus, investors fear further impact from Covid-19 and are preferring cash instead of investments. The Sensex closed the day at 28288 levels, down 581 points. Nifty ended at 8263, down 205 points.

NIFTY BELOW 9000 MARK; MARKET OUTLOOK FOR 18 MARCH 2020

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Corona continues to fear the stock market even Tuesday 17 march 2020 following biggest one-day routs in history as headlines about the coronavirus outbreak and its global economic impact whiplashed investor sentiment.  The Sensex ended at 30579, down 811 points while Nifty ended at 8967 levels, down 230 points. The second emergency cut in interest rates by the U.S. central bank in a fortnight only added to the sense of panic among investors, worried that the coronavirus pandemic is paralyzing supply chains and squeezing company finances.

NIFTY NEAR 9000 MARK; MARKET OUTLOOK FOR 17 MARCH 2020

Coronavirus impact continues on the market. Market closed near 8% down as moves by central banks across the globe to cut interest rates failed to calm nerves due to coronavirus pandemic on the global economy. The US Federal Reserve slashed interest rates in its second emergency move this month, while its major peers offered cheap US dollars in a bid to prevent global lending markets from collapsing. Reserve Bank of India governor is scheduled to hold a press conference later in the day with many market participants expecting a rate cut. Nifty closed down 7.61% at 9197 while the Sensex settled 7.96% lower at 31390.

50 SHADES OF RED

NIFTY PLUNGES 10%, HITS LOWER CIRCUIT; MARKETS HALT TRADING FOR 45 MINUTE 
Markets across Asia collapse

Nikkei down 8.5%,

Shanghai 3.3%,

Hang Seng 6%,

Singapore 5%,

Kospi 8%

Market trading to resume from 10.20 onwards

Next Nifty circuit level at 8,151 down 15%

NIFTY NEAR 9500 MARK; MARKET OUTLOOK FOR 13 MARCH 2020

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Big bold black NIFTY… 12 March 2020 become historical day for Indian stock market. Indian stocks markets were hit today by another big selloff with Sensex registering its biggest one-day fall in absolute terms. The Sensex tanked 2919 points to 32778 - its biggest one-day point fall - tracking a crash in global equities after the coronavirus outbreak was termed a global pandemic by World Health Organization. Today's market fall wiped out 11.26 lakh crore of investor wealth in a day. The Nifty also crashed 8% to 9633. Stunning the markets, US President Donald Trump suspended all travel to the United States from Europe, except from the United Kingdom, for 30 days starting Friday.

NIFTY OUTLOOK & OPTION CALL PUT TIPS FOR 12 MARCH 2020

After a gap down opening market shown a quick recovery from the lows and closed flattish. The Sensex ended at 35697, up 62 points while Nifty ended just 7 points higher at 10458 levels. Global impact of coronavirus which is still spreading at high rate in countries other than China and collapse of oil prices are having a catastrophic effect. Rate cuts and stimulus measures are not working at the time being. Even though risk concerns continue to remain elevated, inflow into domestic equity mutual fund surged to highest level in 11 months indicating investor confidence on a long-term perspective. Going ahead rate sensitive stocks are likely to remain focused as consensus estimate show CPI inflation for the month of February eased to 6.80 per cent. But market expects RBI to cut rate in the next policy.

BLOODBATH ON D-STREET

SENSEX DROPS 1500 POINTS NEAR 36000 , NIFTY NEAR 10550 DOWN BY 420 POINTS

NIFTY WEEKLY OUTLOOK & OPTION CALL PUT TIPS FOR 9 MARCH TO 13 MARCH 2020

WEEKLY RESISTANCE FOR NIFTY: 11000, 11200,11500

 PIVOT POINT: 10800

WEEKLY SUPPORT FOR NIFTY:  10700, 10600, 10500

WEEKLY CHART FOR NIFTY

DAILY RESISTANCE FOR NIFTY: 11050, 11100, 11150
PIVOT POINT: 10900
DAILY SUPPORT FOR NIFTY:  10850, 10800, 10750
DAILY CHART FOR NIFTY

Market is badly affected by the coronavirus in this past week. Nifty closed the week below 11000 mark. The Nifty had a huge nose dive in this week. Overnight weak global cues along with troubles in the banking sector took toll on the Nifty as it shed around 300 points on Friday 06 March 2020. The sell-off in the market was triggered by weak global trend due to coronavirus outbreak, restricting international travel and trade. Additionally, moratorium enlarged domestic concern over safety of financial system and Indian rupees weaken past 74 levels due to these issues. The bailout is a positive development lowering long-term systemic problems and will increase safety for depositors.