Last week nifty futures opened gap down at 8010.1 and crashed -5.9% last monday. The next day nifty made a panic intraday bottom at 7665 followed by a sharp recovery to test 8125 during the same week. Volatility in the market inclined up and it is expected to continue in the near future. Naked option writers has to be cautious as the risk reward ratio with a given volatility is very low at this point.
Nifty and Bank Nifty weekly future charts suggests the RSX is still in declining mode and the downtrend is expected to continue for another 1 or 2 weeks before bottoming out. However any close above 8150 could bring back more bullishness in the market.
Last monday India VIX jumped 64.35% which is the biggest ever move since the introduction of India VIX component. And post the peak IndiaVIX started declining down and the week ends with the closing at 23.3. It should be noted that last week intraday VIX high is at 35.6