India VIX, which measures the expected volatility in the markets, has been in a range of 14.5-15.5 for last couple of weeks.
The Nifty50 largely remained volatile with a negative bias after an initial hour of rally, and closed half a percent lower on June 23, forming bearish candle on the daily charts as the closing was lower than opening levels. Metals, IT, select banking & financials, FMCG and pharma stocks pulled the index lower.
Experts expect the coming session to be volatile given the expiry of June futures & options contracts tomorrow.
India VIX, which measures the expected volatility in the markets, has also been in a range of 14.5-15.5 for last couple of weeks. It rose by 4.24 percent from 14.73 to 15.36 levels.
The Nifty50 opened higher at 15,862.80 and hit an intraday high of 15,862.95. After a positive trend in an initial hour of trade, the index turned volatile and hit a day's low of 15,673.95 in late trade. It fell 85.80 points to close at 15,687.
"Two consecutive bearish candles from the highs of 15,900 may be hinting at a potential Double Top formation around those levels. Hence, if Nifty continues its slide below 15,673 levels in next session then it should ideally head back to the recent lows present in the 15,500 – 15,450," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in told Moneycontrol.
"Index is hovering around its 20-day moving average (15,678) and sustaining above 15,670 is inevitable in next session to prevent further damage. Though larger trend as of now is looking sideways between 15,900 – 15,500 levels, the direction of next session may get influenced by expiry related factors," he said.
In any case strength in the Nifty shall not be expected unless it closes above 15,900 levels and till then it looks prudent to avoid long side bets on index, he added.
Therefore, for the time being, Mazhar Mohammad of Chartviewindia.in advises traders to sit on the fence but aggressive intraday traders can go short below 15,670 and look for a target around 15,550 levels by placing stop above intraday high.
On options front, maximum Put open interest was seen at 15,500 followed by 15,600 strike while maximum Call open interest was seen at 15,800 followed by 16,000 strike. Call writing was seen at 15,800 then 15,750 strike while Put writing was seen at 15,550 then 15,600 strike.
Option data indicated that the Nifty50 could see a wider trading range of 15,500 to 15,900 levels while an immediate range may be 15,600 to 15,800 levels.
Bank Nifty opened positive at 34,911.85 but failed to surpass 35,000 levels and remained under pressure for most part of the session. The index fell 171 points to close at 34,574, forming a bearish candle on daily scale and stuck in the grip of option writer ahead of its monthly expiry.
"Now it has to hold above 34,500 to move up towards 34,750 and 35,000 while on the downside support is seen at 34,250 and 34,000 levels," said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
On stocks front, he further said bullish setup was seen in Bharat Electronics, Maruti Suzuki, Dr LalPathlabs, Titan Company, Siemens, Bajaj Finserv, Max Financial Services, UltraTech Cement and ICICI Prudential Life while weakness was seen in NMDC, Adani Ports, Indus Tower, Indiabulls Housing Finance, Indraprastha Gas, JSW Steel, LIC Housing Finance and Muthoot Finance.