By Chandan Taparia
The Nifty50 index opened in the positive on Friday and managed to settle above the immediate hurdle at 10,650 after consolidating for last nine sessions.
It has been making higher lows from last three sessions and hovering near its 50-day EMA. It formed a bullish candle on daily scale, after forming an Inside Bar in the last session and a bullish Pin Bar on the weekly scale.
The candle formation suggests the decline is being bought into and the bulls are gaining an upper hand in the market. Now, it has to hold above 10,650 to witness an upward move towards 10,750 and then 10,800-10,850 zone, while on the downside, support exists at 10,550 level.
On the options front, maximum Put OI was at 10,000 followed by 10,200 level while maximum Call OI was at 10,800 followed by 11,000. There was Put writing at 10,600 followed by 10,700 levels, while Call writing was seen at 10,800 followed by 10,700 levels, which can restrict the upside momentum. The Options band signified an immediate trading range between 10,550 and 10,800 levels.
India VIX fell 0.54 per cent to 18.35 and volatility is narrowing down since last three sessions. VIX has to cool down below the 17-16 zone to get the next leg of smooth upside rally in the market.
Bank Nifty opened flat and witnessed buying interest towards 26,300 level. It has been making higher highs from last trading sessions and recently saw a breakout of the consolidation range above the 25,900-26,000 zone. The index formed a bullish candle on the daily as well as weekly scale and indicated that the bulls are holding a grip on the market.
Now, it has to hold above the 26,000 mark to extend its move towards 26,500 and then 26,750 levels, while on the downside, support is seen in the 25,800-25,750 zone.
Nifty futures closed positive at 10,690 with a gain of 0.56 per cent. Long build up was seen in Canara Bank, Siemens, Orient Bank, Arvind, Bharti Airtel and Divis Lab, while shorts were seen in Tata Elxsi, Repco Home, NMDC, YES Bank, Indiabulls Housing Finance and Reliance Infra.
(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)