By Chandan Taparia
The Nifty50 index opened with a gap up and extended its gains towards the 10,710 level on Monday. It formed a bullish candle on the daily scale and made higher highs and higher lows for third consecutive session.
As long as it holds above 10,620, Nifty may extend its gains towards 10,735 and then 10,800 level, while on the downside, supports are seen at 10,620 and then 10,550 levels.
On the options front, maximum Put open interest was intact at 10,500 followed by 10,600, while maximum Call OI was at 10,800 followed by 11,000. There was significant Put writing at strike prices 10,700, 10,650 and 10,600, which suggests extension of the upward move while Call unwinding was seen at all immediate strike prices, which has created room for further upside.
Options data suggested a shift in trading range between 10,600 and 10,800 levels.
India VIX moved up 3.28 per cent to 13.05 level.
Bank Nifty continued its positive momentum for the third consecutive session and headed towards the 26,700 level. It formed a Three White Soldiers kind of pattern on the daily scale, which implies that the bulls are holding a tight grip and continue to form higher highs and higher lows.
As long as it holds above 26,500, Bank Nifty could extend towards 26,750 and then 27,000 levels, while on the downside, supports are seen at 26,250 and then 26,000 levels.
Nifty futures closed in the positive with a 0.69 per cent gain at 10,676. Long buildup was seen in HeroMoto Corp, Idea, Indiabulls Housing Finance, Havells and Pidilite while shorts were seen in Bharti Airtel, TechM, PC Jewellers, UBL and M&M.
(Chandan Taparia is Technical & Derivative Analyst at Motilal Oswal Securities. Investors are advised to consult financial advisers before taking an investment calls based on these observations)