*MOFSL Technical Update - Greed and Fear Indicator*
CBOE VIX is cooling down from its recent high of 85.47 and now near to 41.67 marks. It has corrected by more than 50% from its swing highs and also falling from last three consecutive weeks. Decline in VIX is also supporting the fear sentiment to top out which has provided bounce to Global and Indian equity market.
India VIX moved to 11 years high in March month and thus, we witnessed sharp decline in the market. It fell down by 10.05% to 49.74 levels in last week. It has corrected by 42.60% from its recent swing high of 86.64 to 49.74 levels and made lower top - lower bottom from the last six trading sessions giving some comfort to bulls in the market; but short bounces should not be considered as the start of the bull rally.
Currently, India VIX is hovering around 50% retracement level of the entire up move from 9.62 to 86.64. Below that, major support for VIX is placed at 40 levels, which is confluence zone of 61.80% retracement level and previous swing highs.
Thus, looking at overall chart structure, we may again see bounce in volatility index either from current levels or from 40 zone, which would be a negative sign for our benchmark indices. Overall higher volatility across the Globe indicates uncertainty and weakness, thus volatile swings cannot be ruled out.
*Technical & Derivatives Research, Motilal Oswal*
