The last hour of the session saw a rally fuelled by the bulls, and the index settled for day with a decent gain of around 1.5%. Nifty formed a healthy bullish candle on the daily and weekly charts and formed higher highs for the 12th session in a row. Now, it has to hold above 14,200 level to witness a fresh move towards the 14,500 level, while on the downside major support exists at 14,100 and 14,000 levels.
India VIX rose marginally by 0.10% from 20.62 to 20.64 level. Volatility needs to cool down below 20 zone to support the bullish market setup and fuel the next rally with a higher market base.
On the options front, maximum Put Open Interest stood at 13,000 level followed by 14,000, while maximum Call OI was seen at 14,000 followed by 14,500 levels. There was minor Call writing at 14,400 and then 14,700 levels while Put writing was seen at strike price 14,200 and 14,300 levels. Options data suggested a wider trading range between 14,000 and 14,600 levels, while the immediate trading range was seen between 14,100 and 14,500 levels.
Bank Nifty opened with a gap up near the 32,300 mark, but could not sustain at higher levels and slipped thereafter. It formed a bearish candle on the daily scale as closed below its opening mark but continued to form higher highs for the fifth trading session. Now, the index has to hold above 31,750 level to witness a rise towards 32,500 and 32,613 levels, while on the downside support exists at 31,500 and 31,200 levels.
Nifty futures closed positive at 14,374 level with 1.29% gain. The trade setup looked positive in Maruti, TechM, Wipro, MRF, UPL, Page Industries, Havells, Hero MotoCorp, Infosys, Eicher Motor, SRF, Balkrishna Industries, Mindtree, PowerGrid, ACC, M&M, Sun Pharma, Ultratech Cement, TVS Motors, Voltas and Bajaj Auto but weak in Idea, Manappuram Finance, SAIL, Canara Bank, Aurobindo Pharma and ITC.
Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)