By Chandan TapariaThe Nifty50 index opened positive on Monday but failed to hold its opening gains and remained consolidative taking support at 10,850 level.
The index closed on a flat to positive note with lesser trading volume on last session of calendar year but formed a bearish candle on technical charts as it below its opening level.Nifty has been making higher highs and higher lows for last three sessions and now if it negates same by holding below 10,850 level, then it may decline and retest its major support at 10,777 level.
On upside, it faces resistance at 10,925 and then 10,985 levels.The index closed calendar year at 10,862 with a marginal gain of 3.15 per cent against Calendar 2017s closing level of 10,530.
It made a new lifetime high at 11,760 but remained highly volatile, trading in a wide range of around 1,800 points between 9,951 and 11,760 levels.Nifty ended December on a flat to negative note at 10,862, against November closing of 10,876.On options front, maximum Call open interest was at 11,200 followed by 11,000 levels, while maximum Put OI was at 10,500 followed by 10,000 level.
No major and significant OI activity was seen on last session of year, even as option band signified a broader trading range between 10,700 and 11,000 levels.India VIX moved up 4.78 per cent to 16.
VIX has to cool down below 16 mark to get a chance to surpass immediate barrier at 10,985.
Bank Nifty traded in a narrow range between 27,100 and 27,285 levels for most part of session.
It remained dull for second consecutive session and followup buying was missing at higher levels.As long as it holds above 27,000, index may extend its move towards 27,350 and then 27,500 levels, while on downside, major support exists at 26,850 and then 26,666 levels.Nifty futures closed positive at 10,918 with a gain of 0.10 per cent.
Long buildup was seen in Chennai Petro, Concor, Jindal Steel, Muthoot Finance, DHFL, Colgate Palmolive, Ujjivan and Biocon while shorts were seen in CESC, Torrent Pharma, OIL and Engineers India.(Chandan Taparia is Technical Derivative Analyst at MOFSL.
Investors are advised to consult financial advisers before taking an investment calls based on these observations)