Technical Analysis of Indian Equities by Nooresh

India Vix and Nifty Co-relation — Super Contra Trades

IndiaVixand Nifty


India Vix and Nifty Co-relation :


The basic co-relation between INDIA VIX and Nifty is an inverse one. So if VIX hits a high implies Nifty will bottom out but how much VIX will you expect to give the Nifty bottom ? Well thats where expertise of Analyse India helps to time such contra trades. Above all it alerts Short traders to cover shorts and book profits at least 🙂


Last Tuesday on October 4 at 11.51 am in the morning made a quick post -

Alert – INDIA VIX hits a high of 39 showing extreme panic –


after that index made a low of 4728 and 4741 the next day. Majority of the analysts were looking at a possible short trade but we got into a contrarian view to buy the decline. Keeping in mind the volatility the option to buy till 4550 was open in case of any adverse news.


Since then now Nifty almost did 5000 which is a cool 250 points from the low satisfying our previous VIX views of 6-8% jumps.


Although we did not take a Nifty long strategy we took a view to take short strangle and continue to hold it. The premium inflow for two strategies was 215 ( 2 strikes ) and 415 ( 4 strikes ) was closed at 115-120 and 220 levels giving a neat gain of 5-8% on the deployed capital 🙂


Look at our previous contra trend updates on India Vix.

Alert – India VIX trading at 37 levels and ATM Vols at 38-40 – Buy staggered at 4720-4820 and 4550 worst case.


Alert – INDIA VIX at 33-34 levels . ATM Vols also at 31 and OTM vols 35-38 % – Panic indicator at high buy staggered or in sharp declines.


After the US downgrade and many other news index was at 4950-5000 on 9 the August and today on 10 October the index is still at 4950-5000. The above statistic looks surprising in terms of how the sentiments have moved around in the last 2 months !!! with the index at the same place. Many traders got trapped on either side due to sentiments and we at Analyse India kept alerting on how to buy the dip and book the rise.


In the same period we did a lot of Option Strategies to get 5-7% returns utilizing the sluggish index conditions. We would soon be introducing a Option Strategy + Nifty calls combo service at a discount next week.


Have not been able to update more on stock specific recommendations as many of them are being copied by other people as well as busy with work and social commitments 🙂



The current view is to watchout for resistance at 5035-5050 and till we dont cross 5120-5150 trendline we may need to follow the simple strategy of buy the dips book on rise :). Although this week may see lot of stock specific action but trades will have to be quick.


on a lighter side Blackberry Services have just stopped functioning:) for many telecom operators , there would be lesser inside info and Heard on Street tomorrow if issue not resolved tonight.


For people on facebook do look at our page and like it ;)  Analyse India . We may soon be updating more on my twitter account as well – Nooreshtech on twitter


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Happy Investing,


Nooresh Merani

Article by Nooresh Merani

Nooresh has written 2808 articles.

You can follow Nooresh Tech on Facebook and Twitter here.

{ 12 comments… add one }
  • P K GUPTA October 11, 2011, 08:10

    Dear Nooresh,

    I am enclosing hourly Gold chart and it seems it is going for a further rise. Can you please comment.

    • nooresh October 11, 2011, 23:58

      Hi Praveen,

      Its still a bounce back on gold needs to cross 1680

      • Vivek Talwar October 12, 2011, 00:11

        I think gold is strong above 1700, if able to cross that in next 3-4 trading sessions then we can see quick 100 $ move in gold.

  • KM ANAS October 11, 2011, 10:07

    whats the future of below stocks,

    Pattel enginearing
    cromptone greaves.

    • nooresh October 11, 2011, 23:58

      Hi Anas,

      No view on the above stocks

  • Harsh Vora October 11, 2011, 17:00

    Nooresh Sir i have bought moldtek packaging bse code no. 533080.
    I have bought 2000 shares of this company @ 56. it has hit 65 in intraday today and closed at 63 level. What level should i look to book my profits.

    • nooresh October 11, 2011, 23:57

      Hi Harsh,

      I dont track the stock that closely

  • Pradip Kumar Ray October 26, 2011, 08:38

    I liked your snippet on negative co-relation between VIX and NIFTY. However the deduction I could not see . Have u regressed it ? I of my own had been trying to find out a Discriminant Model on this.
    Further do u have any work on SMR ?

    • nooresh October 28, 2011, 22:34

      Hi Pradip ,

      I think you should search for India Vix on the blog and go through all the posts and will come to know about the 🙂 deductions and how we timed our entry.

      THere is never a direct co-relation

  • pankaj April 30, 2012, 16:32

    Dear Nooresh ,
    Sir,.I am reading into your comments about the inverse correlation of nifty with indiavix. It is quite interesting and informative for short traders.
    I am a day trader and want to improve upon my day trading. I shall remain highly obliged if some other correlations are made known for example , dollar index,crude,dow jones etc.,especially with respect to specific sectors like IT /METAL/REALTY.
    Thanking you in anticipation for your reply,

    • Nooresh May 7, 2012, 10:07

      Well co-relations work only for small time so cant trade on them but keep them in mind.

  • vimal Goswami January 22, 2016, 23:30

    Really this information is very good. But I want to understand this information in practically that means help of some numerical. And I also want to learn greek option theory and practical so sir if u have any easy material for my understanding pls send me


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