By Chandan Taparia
Nifty index opened positive, but failed to surpass its immediate hurdle of 10,620-10,630 zones and corrected towards 10,537 levels.
The index formed a bearish candle similar to a 'Dark Cloud Cover' on the daily scale, and respected to its 38.20 per cent retracement of the entire down leg from 11,171 to 10,276 levels.
Now, it has to surpass the immediate hurdle of 10,620-10,630 zones to extend its bounce back move towards 10,720, else some profit booking could be seen towards immediate support of 10,500 then 10,430 levels.
On the option front, maximum put open interest is at 10,400, followed by 10,000 strike, while maximum call open interest is at 10,700 followed by 11,000. Fresh call writing is seen at 10,600, followed by 10,700, which could restrict its upside momentum while maximum put writing is seen at 10,400 followed by 10,600 strike. Option band signifies a trading range of 10,450-10,700 zones.
India VIX moved up by 1.66 per cent to 13.92.
Nifty Bank opened flattish and witnessed selling pressure till the end of the trading session to settle at 25,383. It formed a bearish candle on daily scale, which has a bearish implication.
Nifty Bank has been underperforming the Nifty index and heavy selloff in PSU banks has dragged the index lower by more than 300 points.
Now, till it holds below 25,500 zones further weakness could drag it towards 25,250 and then 25,000, while on the upside hurdles exists at 25,600 then 25,800 levels.
Nifty futures closed with a loss 0.34 per cent at 10564. Builtup of long positions were seen in Godrej Consumer Products, Marico, IGL, Idea and Jubilant FoodWorks, while shorts were seen in PNB, Ambuja Cements, Bank of India, Pidilite, Apollo Hospitals and Ceat.
(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)