The Nifty50 finally negated its lower highs and lower lows formation after four sessions and continued its positive momentum. The index formed a bullish candle on a daily chart, which suggests that bulls were not loosening their grip on the market.
Now, till the index holds above the 10,580 level, it can extend its gains towards 10,750-10,770 zone. On the downside, supports are seen at 10,580 and then 10,550 level.
On the options front, maximum Put open interest was seen at 10,500 followed by 10,600 strike, while maximum Call OI was at 10,700 followed by 10,800 strike. Meaningful Put writing was seen at 10,600 followed by 10,650 strike, whereas Call Unwinding was at all the immediate strikes with minor Call writing at 10,750 strike
India VIX fell down sharply by 10.22 per cent to 18.31 level. The sudden fall in VIX might provide short-term stability in the market.
Bank Nifty opened negative, but witnessed buying at lower levels to settle in the positive territory. It formed a bullish candle on the daily scale and gave consolidation breakout of the 26,000-26,350 range.
Now, till the index holds above the 26,250 zone it can extend gains towards 26,650 and then 26,750, while on the downside, supports are seen at 26,333-26,250 zone.
The Nifty futures closed in the green with a gain of 0.46 per cent at 10,688. Built-up of long positions were seen in Cummins, Colgate Palmolive, HCL Technologies, TCS and RBL Bank, while shorts were seen in HUL, Havells, Vodafone Idea and Yes Bank.
(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking investment calls based on these observations)