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By Chandan Taparia The Nifty index managed to respect multiple support at the 11,550 level and witnessed an upward move towards the 11,650 level as strong buying interest emerged in the second half of the session.
The index negated the formation of lower highs of last three sessions and formed a Small Bullish Candle on the daily chart and a Small Bearish Candle on the weekly scale.
The price setup on the daily scale suggests supports are intact but hurdle was also visible at the lifetime high level at 11,761, which is restricting the upside momentum.
The index has been consolidating between 11,550 and 11,760 levels for last 11 sessions and now needs to hold and sustain above the same to retest its lifetime high of 11,761 and then 11,888 levels, while on the downside crucial support is intact at 11,550.
On the option front, maximum Put open interest was at 11,000 followed by 11,500 levels while maximum Call OI was sat 12,000 followed by 11,800 levels.
Put writing was seen at 11,500 followed by 11,700 levels while there was Call unwinding at all immediate strike prices.
The Option band signified a trading range between 11,550 and 11,750 levels.
India VIX moved up marginally by 0.18 per cent to 20.99 level.
A sudden spike in VIX indicated limited upside and volatile swing ahead.
Bank Nifty managed to hold previous day’s low and gradually extended its gains towards 30,000 level.
It negated the formation of lower highs after four sessions but formed a Bearish Candle on the weekly scale.
Now it has to cross and hold above 30,000 to witness an upward move towards 30,250 and then 30,500 levels while on the downside major support is seen at 29,700 and then 29,500 levels.
Nifty futures closed positive at 11,688 with a gain of 0.33 per cent.
Long buildup was seen in IGL, REC, CEAT and ITC while shorts were seen in Jubilant Foodworks, CG Power, Bank of India and Havells.
(Chandan Taparia is Technical Derivative Analyst at MOFSL.
Investors are advised to consult financial advisers before taking an investment calls based on these observations)
