By Chandan TapariaThe Nifty index opened with gap up on Friday and witnessed sustained buying throughout the session.
It formed a bullish candle on the daily chart as well as weekly scale, which implies that every decline is being bought into in this market.As long as the index holds above 11,300 to extend its move towards the 11,400-11,435 zone, while on the downside major support is seen at 11,250 and then 11,171 levels.On the options front, maximum Put open interest exists at 11,000 followed by 11,200, while maximum Call OI was at 11,500 followed by 11,400.
There was meaningful Put writing at 11,300 followed by 11,200 levels, whereas Call Writing was seen at 11,600 followed by 11,700.India VIX moved down 3.84 per cent to 12.07.
Overall lower volatility suggests the bulls are likely to hold the market on declines near major support zones.Bank Nifty managed to respect its previous days low and attracted buying towards the 27,720 level.
It negated formation of lower highs and lower lows and formed a bullish engulfing candle on the daily scale, which suggests support-based buying at lower levels.
Now, it has to hold above 27,650 to extend its move towards 28,000 and then 28,250 levels, while a hold below 27,500 could drag it towards the 27,250-27,165 zone.Nifty futures closed in the positive with a gain of 1.01 per cent at 11,396 level.
Long buildup was seen in Torrent Pharma, NIIT Tech, Axis Bank, Indiabulls Housing while shorts were seen in Nestle, Ramco Cements and Star.(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)