F&O: Nifty50 has to sustain above 10,650 to extend gains; Vix rising

By Chandan Taparia

The Nifty50 index opened with a gap up and made an intraday low of 10,490 on Monday, but managed to recover sharply from lower levels and settle at 10,628.

The index formed a Hammer candle on the daily scale, which suggests every decline is being bought into. The index is hovering near its 50-day EMA and the crucial juncture of 10,650. It now needs to sustain above the same level to extend its gains towards 10,700 and then 10,770 levels, while on the downside, support is seen at 10,550 and then 10,500 levels.

On the options front, maximum Put open interest stood at 10,500 level followed by 10,000 while maximum Call OI was at 10,700 followed by 11,000. Meaningful Put writing was seen at strike price 10,500 followed by 10,600 whereas Call unwinding was seen at all immediate strike prices.

India VIX moved up 2.10 per cent to 19.56. Volatility has to cool down below 17-16 levels to get the next leg of smooth upside rally, else volatile up and down swings could continue in the market.

Bank Nifty opened positive and witnessed sustained buying for the major part of the session and managed to settle above the crucial hurdle at 26,333 level. It formed a bullish candle on the daily scale and broke out of the consolidation range between 26,000 and 26,350 levels. As long as Nifty holds above 26,250, it can extend its gains towards 26,500 and then 26,750 levels, while on the downside, support is seen at 26,100.

Nifty futures closed positive at 10,645 with a gain of 1.14 per cent. Long buildup was seen in Godrej Consumer, Marico, Asian Paints and Colgate while shorts were seen in Jindal Steel, Havells, ACC and Shriram Transport Finance.

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