Negative divergence on RSI indicates that some bit of cool down may take place before resume of upmove in volatility. Break of RSI failure should be observed for confirmation. Option writing can be done who can take high risk and do not want to wait for RSI failure breakout. 80-40 rule of RSI must be remembered while observing CBOE VIX.
Both SP500 and NIFTY have displayed a similar pattern in the past 1 year and now both are at the edge of the previous tops. combine this with the fact that VIX is at near lows, we are all set for potential volatility in the weeks ahead.
Volatility is back in the markets after a while and does not look like it will cool off anytime soon.
Another series of spikes is expected which can take INDIA VIX to 25.
Weekly chart of the volatility index shows the range between 16-25 for coming months.
High VIX = Inflated premiums on option contracts.
For beginners ,
India VIX is a volatility index...
SunPharma has hit its bottom and one can expect a small bounce back. Buy for a target of 510-530 in 5-10 trading sessions with a stop loss at 449.
Note: These calls are based on my own analysis. It may or may not work well for you. So please carefully consider whether it is suitable for you and please do your own research before attempting any. The profit/loss...
This time around the budget is more special than usual years, it is the budget after demonetisation and is coming one month earlier than usual. As seen in the chart and the green boxes the volatility usually peaks during the budget, this time we should expect no different. Another point is the strong negative correlation between the India Vix and Nifty. So good...
