The Nifty50 index opened in the positive and made a new lifetime high of 10,631 in Monday's trade. It formed a bullish candle for the second consecutive session with runaway gaps and continued its positive momentum after the recent breakout.

The index closed in the positive with a gain of around 65 points and saw the highest daily close. Now, the index needs to hold above 10,550 to extend its upmove towards 10,700, while on the downside, supports are seen at 10,500 and 10,450 levels.

On the options front, maximum Put open interest stood at 10,400 followed by 10,500 while maximum Call OI was at 11,000 followed by 10,600. Significant Put writing was seen at strike prices 10,600 and 10,500, which is shifting the support, while fresh Call writing was seen at 10,800, which is creating scope on the higher side.

The option band signifies a shift in support to 10,500-10,550 zone, as it has seen fresh Put OI congestion.

India VIX moved up 4.77 per cent to 13.73. It has to hold below 13-12.50 levels to support a fresh leg of rally with a smooth ride in the market.

Bank Nifty continued its rise and headed towards the 25,771 level. It has been underperforming the Nifty index but making higher highs and higher lows for last four sessions. Now, it has to sustain above 25,650 to see a fresh move towards 25,750 and then 25,950 levels, while on the downside supports are seen at 25,400 and then 25,250 levels.

Nifty futures closed in the positive with a gain of 0.50 per cent at 10,626. Long buildup was seen in Mindtree, ZEEL, Wockhardt Pharma, NIIT Tech, IDFC Bank, Coal India, L&T, Glenmark, Federal Bank, Hexaware and IndusInd Bank, while shorts were seen in IGL, Bharti Airtel, Idea, Voltas, Bank of India and Castrol India.

(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)