How I Read and Observe India VixHow I Read and Observe India Vix. IndiaVix vs NIFTY50 Market volatility and market direction.
VIX CBOE Volatility Index
VIX drop!Significant DROP $NSE:INDIAVIX!!
Which risk is NOT there anymore? Indian defense stocks are also breaking out.
Why this drop? What next after these lows in India VIX for Indian markets?
India VixThe volatility index tends to rise usually contra to Nifty. Currently at 21 has caused large red candles in hourly time frame today, further upside could be more lethal. A daily close above 22.50 will move it towards 24 and above that towards 30. A rising VIX suggests intra day moves get vertical with gap openings. Getting caught on the wrong side can cause massive m2m damage. It usually cools off after a correction or at an event - since we are into Q3 results - large cap noes and Budget on Feb 1 are some factors to be kept in mind.
PS: This is not a suggestion to go bearish, just a suggestion to cut down on exposure
VIX CRUNCH31ST JAN WAS THE DAY WHEN 1ST CORONA CASE WAS REPORTED IN KERELA AND VIX WAS AROUND 17.4 FROM THERE WE SEE THE RISE UPTO 84 AND REVERSE IT IS ABOUT O ENTER IN PRE CORONA LEVELS
TO THOSE WHO TRADED IN LAST 4-5 MONTHS BE CAUTIOUS THAT VOLATILITY WILL OBSERVE CRUNCH NO MORE DAILY 1-2 % SWING BOTH SIDE ON NITFY AND BANK NIFTY PLUS MANY STOCKS WILL END UP IN RANGE BOUND ZONE SO BE ADAPTIVE WITH YOUR TRADING STYLE AS MARKET CHANGES WE ALSO HAVE TO CHANGE
HAPPY TRADING
India VIXAs expected it has declined to 50 from its highs. It has very strong support between 47-50. Sustaining below these levels could take it all the way back to 30-20, which in turn would be good for equities as a falling vix gets stability which leads to a calm recovery in terms of both PRICE & TIME, so what is being perceived a quick bear rally could turn out to be a much more stable bounce back attempt. On the other hand, a reversal from here sees resistance near 65 and then a major one at 75. Anything above that would lead to mayhem once again.
NiftyAs per ICHIMOKU study - Monthly, Daily, Hourly, 15mins & 5mins all showing 9800 as crucial. So if we are looking for this Monthly Kumo bottom to hold then we need to be prepared for some consolidation between 9800-8500 also. VIX is at extremes, until it starts cooling be prepared for swings as well if these lows are to be held. However, if again dips lower the next support is at 7900. Nifty P/E currently is at 18 (trailing) & 13 (forward) kind of levels we have not seen since 2008.
India VIXAlmost every year India VIX tends to test the lower end of its range and reverses sharply in JAN. A trigger for this usually is the Annual Budget (Vix rising as a lead up to the event). It appears that the same scenario might be repeated in 2020. However, this time we have a global trigger as well which could fuel the rise in VIX (as and when it happens) Gold & Silver breakout and USD/INR which is very close to a breakout above 70.40 (in this case it should be noted that US$ is so far fairly muted against major currencies).
We could initially see the Standard Deviation variation between Equity > Commodities / Currency expand. As a result, firstly the range will get broader, secondly price movement/reaction will be faster. Hence, option writing as Jan series gets into momentum might not be a safe hedge as it has appeared in NOV-DEC. Positional traders might get caught on the wrong side time and again as Swing traders are going to love the series
