High Volatile Choppiness is the name of the game being played in Nifty. Since 25th of May lack of serious buying and lack of serious selling is witnessed which is keeping the market in a range despite Chinese market crashing and emerging market currency crisis. Local currency USDINR too touched all time high and currently around 68.74.
Put writers are currently active for this series at 10600PE strike and call writers so far defending 10900CE strikes. Which brings the possibility of Nifty trading in a band of 10600 – 10900 in a very short term. Recent Under performance of HDFCBANK and RELIANCE and the out-performance of IT stocks(INFY, TCS) could keep Nifty in the 10600 – 10900 range.
From the profile perspective, emotional reactions continues with structure forming poor most of the days which indicates more of short term play and the serious money from higher timeframes is clearly missing so far. Short term stops for shorts are built around 10705 and 10810 levels.
India VIX is below 14 handle. 10550 is the one of the key reference zone to watch out as it is the mid price zone for this year 2018 so far. Things breaking below that could be a serious concern