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By Chandan TapariaThe Nifty50 index managed to recover the entire losses of Thursday’s session and closed above the crucial 50-day EMA.
It formed a strong Bullish Candle on the daily scale and a Hammer Candle on the weekly chart, which suggest the decline got bought into.
As long as the Nifty50 holds above 10,660 level, it could extend the gains towards 10,770 and then 10,835 levels, while on the downside supports are seen at 10,660 and then 10,620 levels.
On the options front, maximum Put open interest stood at 10,600 followed by 10,500 while maximum Call OI was at 11,000 followed by 10,800.
Significant Put writing was seen at strike price 10,600 followed by 10,700, while Call writing was seen at 11,000 and then 10,800.
The options band signified a trading range between 10,650 and 10,800 levels.
Maximum Put open interest was near the index level, which showed that participants were not expecting dips even after the strong selloff for most part of the week.
India VIX fell 7.26 per cent to 12.93 level.
Bank Nifty finally negated the formation of lower lows on the daily scale after four sessions, but underperformed the broader index.
It formed a Doji candle on daily scale and a bearish candle on weekly scale, which suggested limited upside.
As long as it remains above 26,250, the Nifty could extend its gains towards 26,500 and then 26,750 levels, while on the downside, crucial supports are seen at 26,250 and then 26,100 levels.
Nifty futures closed in the positive with a gain of 1.12 per cent at 10,689.
Long buildup was seen in all sectors, including FMCG, metals and oil gas.
(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)
