By Chandan Taparia
The Nifty50 had a volatile Friday, as the index slipped to 10,600 level in intra-day trade, but recovered sharply to hit a fresh lifetime high of 10,690. The index formed a Dragonfly Doji candle with the long lower shadow, which indicates that the decline was bought into, but the bears put up a tough fight in the market.
The index formed a bullish candle on the weekly chart and registered the highest close on both daily and weekly basis. Now, the index has to hold above 10,600 to extend the rally towards 10,750 and then 10,800 levels, while on the downside, supports are seen at 10,600 and then 10,550 levels.
On the options front, maximum Put open interest stood at strike price 10,500, followed by 10,600, while maximum Call OI was at 11,000, followed by 10,700.
Fresh and significant Put writing was seen at strike prices 10,700 and 10,600, which shifted its support, while brisk Call writing was seen at 10,750 and 10,700 levels. The option band signified a trading band between 10,600 and 10,800 levels.
India VIX fell 1.98 per cent to 13.73. The VIX has to hold below 13-12.50 levels to support a fresh leg of the rally with smooth ride in the market.
Bank Nifty formed a Hammer candle on the daily chart and managed to close near 25,750 mark. It has been underperforming the Nifty index and has remained stuck in a range between 10,500 and 10,800 levels from last six sessions. Now, the index has to sustain above 25,650 to see a move towards 25,950 level, while on downside, supports are seen at 25,500 and then 25,400 levels.
Nifty futures closed in the positive at 10,684, with a gain of 0.28 per cent. Long buildup was seen in ZEEL, Jain Irrigation, ICICI Bank, SRF, Sun TV, Siemens, PC Jeweller, JustDial and Karnataka Bank, while shorts were seen in DishTV, Marico, Hero MotoCorp, Bank of India, Union Bank, IDBI, Canara Bank and Ambuja Cement.
(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)