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By Chandan Taparia Nifty futures opened in the negative, but managed to respect the key support at 10,770 level and recovered to the 10,815 level.
The index closed in the negative and formed a small bearish candle on daily scale, while the weekly candle is forming a small-bodied candle with bigger shadows.
Now, it has to continue to hold above 10,770 to extend its move towards 10,888 level, while immediate support exists at 10,770 and then 10,720 levels.
The index has been making higher highs and higher lows for last three weeks.
A hold above 10,770 would be important for the index to move higher.
On the options front, maximum Put open interest stood at 10,600 and 10,700 levels, while maximum Call OI was at 11,000 followed by 10,900.
There was Put unwinding on all immediate strike prices while Call writing was seen at 10,900 and 10,800 levels.
Options data suggested a trading range between 10,700 and 10,900 levels.
India VIX slipped 4.31 per cent to 12.09 level.
Bank Nifty opened at previous day’s closing levels, but consolidated in a 115-point range between 26,500 and 26,615 for most part of the session.
It has been forming a small-bodied candle from last few sessions, which indicates absence of follow-through on both sides.
The index is in the process of forming a small-bodied candle and an inside bar on the weekly scale, which suggests option writers are having a tight grip on the market.
The index is respecting its rising support trend line by connecting the swing lows of 24,753, 25,662, 25,668 and 26,069 levels.
Now it has to continue to hold above 26,500 to witness an upward move towards 26,750, while on the downside, immediate support is seen at 26,400 and then 26,250 and 26,100 levels.
Nifty futures closed in the negative with a loss of 0.29% at 10,813.
Long buildup was seen in Adani Enterprise, Glenmark, UBL, Star, HCL Tech, Dish TV, Tata Global, KPIT, Hexaware and Cadila while shorts were seen in CEAT, Indiabulls Housing Finance, Sun TV, Mindtree, Ambuja Cement, India Cement and TechM.
(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)
