Index Observation
Nifty has ended at 5 week closing lows yesterday. We had mentioned yesterday that Nifty on daily charts is seen to be forming a bearish head and shoulder pattern with a breakdown neckline standing below 11300. Though this looked less probable yesterday morning but the index eventually gave a closing below 11300 as second half of trading session invited rigorous selling taking cues from European shores. This pattern now opens for further downside to 11070/11021.
Activity in Cash Market
•FII Cash: -539 Crs.
•DII Cash: -517 Crs.
MTD:
•FII Cash: 736 Crs.
•DII Cash: -6185 Crs.
F&O Cues
* FIIs index futures data were neutral yesterday as they have added 2,934 long contracts.
* FIIs net position on index futures stand at 16,466 long contracts.
* On option front, 11000 will act as support as this strike has maximum put open interest. On upside 11500 strike has maximum call open interest. Option chain data indicates wide trading range between 11000-11500
* The volatility index, India VIX has surged 11% yesterday. We expect volatility to remain elevated.