The Nifty index opened in the positive and gradually extended its gains towards the 10,900 level in the latter part of the session. It formed a bullish candle on the daily scale as every small decline got bought into. Now, it has to hold above 10,800 to extend its move towards 11,000 and then 11,176 levels, while on the downside support exists at 10,777 and then 10,700 levels.
On the options front, maximum Put OI was at 10,000 followed by 10,500 while maximum Call OI was at 11,000 followed by 10,900 strike. There was Put at 10,900 followed by 10,800 while Call unwinding was seen at all immediate strike prices. The options band signified a trading range between 10,750 and 11,000 levels.
India VIX fell 4.32 per cent to 14.50 level. It has seen a sharp cut of 32.50 per cent in last five sessions, which suggests the bulls are getting a grip on the market with the expectation of limited downside.
Bank Nifty finally closed above 27,000 and formed a bullish candle on the daily scale. Now, it has to hold above the 26,666-26,850 zone to extend gains towards 27,500 level, while on the downside support is seen at 26,666 and then 26,500 levels.
Nifty futures closed in the positive at 10,911 with a gain of 0.85 per cent. Long buildup was seen in BEML, Vedanta, NIIT Tech, Ajanta Pharma, Wockhardt Pharma and UBL while shorts were seen in Biocon, Kotak Bank, Apollo Hosp, Arvind and Godrej Industries.
(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)