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By Chandan TapariaThe Nifty index had one more volatile session on Wednesday before closing near the 10,650 mark for the third consecutive session.
It failed to hold above 10,700 and closed flat amid selling pressure at higher levels.
The index failed to confirm its short-term trend reversal, which was formed by a Doji candle, as follow-up buying was missing and the index formed a bearish candle.
Now, Nifty has to hold above 10,650 and to cross the 10,700 mark to confirm a short-term trend reversal, else the weakness could continue in the market.
If Nifty manages to hold above 10,690, only then can it seen a bounceback towards 10,777 level, while on the downside, support exists at 10,580 and then 10,535 levels.
On the options front, maximum Put open interest was at strike price 10,600 followed by 10,500 while maximum Call OI was at 10,800 followed by 11,000.
Call unwinding was seen at strike price 10,900, followed by 11,000 while there was Put unwinding at 10,800 followed by 10,900 levels.
The option band signified a trading range between 10,550 and 10,777 levels.
India VIX fell 3.15 per cent to 17.85 but overall higher volatility keep the market volatile and restricted upside.
Bank Nifty relatively outperformed Nifty and witnessed a bounceback towards the 26,900 mark.
It negated the formation of lower lows but remained highly volatile and formed a small-bodied candle on the daily scale.
Now, the index has to hold above 26,666 to witness an extended bounce towards 27,000 and then 27,150 levels, while on the downside, support exists at 26,400 and then 26,250 levels.
Nifty futures closed in the negative at 10,633 with a loss of 0.33 per cent.
Long buildup was seen in ICICI Bank, Axis Bank, Bajaj Finance and ZEEL while shorts were seen in Indiabulls Housing Finance, HPCL, HDFC and Kotak Mahindra Bank.
