By Chandan Taparia

The Nifty50 index continued the formation of higher highs and higher lows for the fifth consecutive session and registered a fresh lifetime high of 10,659.

However, it witnessed a drop from higher level, but finally closed on a positive note. In the process, it formed a small-bodied candle on the daily scale.

Now, the index continues to hold above 10,550 to extend its rally towards 10,700, while on the downside, support is seen at 10,500 level.

On the options front, maximum Put open interest stood at 10,500 followed by 10,400, while maximum Call OI was at 11,000 followed by 10,600. Fresh and significant Put writing was seen at 10,600 and 10,500, which means support is shifting, while fresh Call writing was seen at 10,700 and 10,600 levels.

The options band signified a shift in support to the 10,550-10,600 zone, as this strike price saw fresh Put OI congestion.

India VIX moved up 0.78 per cent to 13.85. VIX has to hold below 13-12.50 zone to support the fresh leg of rally with a smooth ride of the market.

Bank Nifty remained range-bound and closed with marginal gains. It has been underperforming the Nifty index and again got stuck in a range after the rise in last three sessions.

Now, it has to sustain above 25,650 to see a move towards 25,800 and then 25,950 levels, while on the downside, supports are seen at 25,500 and then 25,400 levels.

Nifty futures closed flat to positive with a 0.09 per cent gain at 10,641. Long buildup was seen in Arvind, DCB Bank, PC Jeweller, CEAT, NCC, Titan, Asian Paint, DLF, ITC, Coal India, KPIT and Ashok Leyland, while shorts were seen in UBL, NMDC, Pidilite Industries, Cummins India, ZEEL, Bata India, Havells, Eicher Motor and IGL.

(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)