🧵 India VIX above 21, What does it imply ?
What does the 113% surge in India VIX from recent lows suggest about market sentiment and volatility? 📈
#IndiaVIX #MarketTrends #Volatility #Election
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Ever wondered about India #VIX? 🤔Dive into its significance and calculation methods for insights into market volatility! 📊
🔹 India VIX, the volatility index for the Indian stock market, is calculated using the implied volatility of NIFTY index options. This involves collecting option prices, calculating implied volatilities for options near the money and with near-month expiry, and then weighting these values based on their proximity to the current NIFTY index level and their time to expiry.
🔹 The resulting index gives an indication of expected market volatility over the next 30 days, providing valuable insights for traders and investors.
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Decoding Recent Price Action:
🔹 The volatility index, India VIX has marked low of 9.85 on April 23 and thereafter it has witnessed sharp upside rally of nearly 113 per cent in just 13-trading sessions.
🔹 Today, it has crossed sustained above 21 mark for the first time after September 2022. This level of 21 on India VIX is important as it’s the 50% Fibonacci Retracement of the entire down-move in VIX from 33.97 (Feb 2022) & 8.18 (May 2023).
🔹 Last week, it has given horizontal trendline breakout on weekly scale along-with forming sizeable bullish candle on breakout week.
🔹 The weekly RSI has also surged above 60 mark for the first time after last week of February 2024 which adds to the bullishness in India VIX.
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💼 Crucial Levels for India VIX:
Going ahead, the zone of 18-17.80 will act as immediate support for India VIX. As long as it is trading above this support zone, it is likely to continue its northward journey upto the level of 24, followed by 26.50 in short-term.
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📈 What are the potential outcomes if India VIX continues its upward trajectory? 📈
🔹 Rise in India VIX typically indicates increasing market volatility and uncertainty. This could lead to higher levels of price fluctuations and potentially signal a more cautious or risk-averse sentiment among investors.
🔹 Traders might anticipate greater market swings and adjust their strategies accordingly, while investors may exercise more caution in their decision-making processes.
🔹 Overall, a rising India VIX suggests a market environment characterized by elevated risk levels and the need for careful risk management.
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💡 How should traders and investors respond to the persistent uptrend in India VIX?
If India VIX keeps soaring, it's important for traders and investors to:
🔹 Keep an eye on risk management and maintain strict stoploss 🚦
🔹 Explore hedging strategies 🌿
🔹 Stay in the loop with General Election related news 🗳️
🔹 Stay flexible with your approach 💪"
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Conclusion:
🌟 As India VIX continues its upward climb, it's crucial for traders and investors to stay vigilant, adapt to changing market dynamics, and prioritize risk management. With careful navigation and informed decision-making, opportunities can be seized amidst heightened volatility. #IndiaVIX #MarketInsights 📈
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