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By Chandan TapariaThe Nifty50 index continued to form higher highs for the seventh session and headed towards the 10,424 level.
It formed a Spinning Top candle on the daily chart and now the pace of buying momentum is missing at higher levels after a 470-point recovery in last three weeks.
The index managed to close in the positive above its 50-day EMA but below its opening level.
Now it has immediate hurdle at 10,440 and then 10,480, while holding below 10,380 could lead to some consolidation towards its next support at 10,333 level.
On the options front, maximum Put open interest stood at 10,000, followed by 10,200, while maximum Call OI was at 10,500, followed by 11,000.
There was significant Put writing at 10,400 and 10,300 levels while Call writing was seen at strike price 10,500.
Call writing remained intact at strike price 10,500, which suggests limited upside.
The option band suggests a broader trading range between 10,300 and 10,500 levels.
India VIX fell 2.51 per cent to 14.49.
A decline in VIX suggests rangebound move with limited upside as well downside in the market.
Bank Nifty continued its winning streak for the fourth consecutive session and headed towards its next hurdle at 25,250.
It formed a small bullish candle on the daily chart and has been making higher highs and higher lows for last five sessions.
Now the immediate uptrend could remain intact only if the Nifty50 holds above 25,000, while on the upside, hurdles are seen at 25,500.
If it slips below 25,000, then a small dip could be seen towards its next support at 24,750 level.
Nifty futures closed with a 0.29 per cent gain at 10,424.
Long buildup was seen in Mindtree, Axis Bank, Divi’s Labs, ICICI Bank, Hindalco, Pidilite Industries, SBI, Hexaware, IRB, NCC, Bharat Forge and KSCL while shorts were seen in IGL, HDFC Bank, Federal Bank, KPIT, Marico, CEAT and REC.
(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)
