By Chandan TapariaThe Nifty50 index had a volatile day on Wednesday, as it drifted towards 10,750 level in second half of session and recovered sharply to 10,865 level by end.
The index has got stuck in a range and buying emerged on every dip while Nifty took support at 50-day EMA.The index formed a High Wave candle with long lower shadow as it witnessed a rollercoaster ride in last two hours of session.
Now, it has to hold above 10,750-10,777 zone to witness an upward move towards 10,925 level and then towards its crucial hurdle at 10,985.The index has been facing hurdles at its immediate supply trend line by connecting swing highs of 10,985, 10,923 and 10,880 levels and it requires a decisive range breakout above 10,985 to commence next leg of rally.On options front, maximum Put open interest was at 10,500 followed by 10,000 levels while maximum Call OI was at 11,000 followed by 11,200.
Put writing was seen at 10,900 followed by 10,800 levels while Call writing was seen at 11,100 followed by 10,900 level.
The option band signified a broader trading range between 10,700 and 11,000 levels.India VIX fell 2.74 per cent to 15.27 level.
VIX has to hold below 16 to again see a bounceback.Bank Nifty witnessed buying interest during morning dips and headed towards fresh four-month high of 27,750.
It has formed a bullish candle on daily scale and has been outperforming Nifty for past couple of weeks.
Now, it has to hold above 27,350-27,400 zone to extend its gains towards 28,000 level, while on downside, support exists in 27,150-27,000 zone.Nifty futures closed positive at 10,873 with a gain of 0.26 per cent.
Long buildup was seen in NIIT Tech, Bata India, KSCL and Axis Bank while shorts were seen in LT Finance, NMDC, CEAT, SAIL and GAIL.(Chandan Taparia is Technical Derivative Analyst at MOFSL.
Investors are advised to consult financial advisers before taking an investment calls based on these observations)