By Chandan Taparia
Nifty index opened positive with a gap of around 100 points and headed towards 10,373 levels. However, it failed to hold onto the gains and corrected by around 50 points from higher levels.
The index formed a Spinning Top candle on the daily chart and closed near to its supply trend line by connecting recent swing highs of 10,490 and 10,409. It has been moving in a falling wedge from the last eight weeks and a decisive hold above 10,330 could take it towards 10,409, then lifetime high of 10,490 levels. While on the downside, supports are shifting higher at 10,250 then 10,200 zones.
On the option front, maximum Put open interest is at 10,000 followed by 10,200 strike while maximum Call OI is at 10,500 followed by 10,400 strike. We have seen fresh significant Put writing at 10,300 and 10,200 strike, while Call writing is intact at 10,450 and 10,500 strikes.
Put writing at higher strike suggests shifting of the support, while Call writing intact at 10,450 and 10,500 could restrict its upside momentum.
India VIX fell down by 8.96 per cent to 14.90. VIX has fallen from the recent high of 17.39, and needs to cool off below 13 zones for the index to make a move towards fresh lifetime highs.
Bank Nifty managed to close with a gain of 1.08 per cent. It also formed an indecisive candle on the daily chart and requires a hold above 25,250 zones to extend its move towards 25,700 zones, while support exists at 25,000 then 24,800 levels.
Nifty futures closed with a gain of 0.78 per cent to 10,356.60. Built up of long position were seen in Bata India, Jet Airways, Apollo Tyres, Havells, PC Jeweller, Kotak Bank, M&M, Wockhardt Pharma, Castrol, DCB Bank, Mahindra & Mahindra Financial Services, Voltas, IRB, Shriram Transport Finance and Titan, while shorts were seen in Cipla, Power Grid, Tech Mahindra, Hexaware, Petronet and Bharti Infratel.
(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)
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