The Nifty50 on Wednesday failed to surpass previous day’s high of 10,950 level and despite initial consolidation fell down sharply towards 10,810. The index has broken its consolidation range of last five sessions and slipped below 10,850.

Nifty has been forming lower highs lower lows on daily scale since last two sessions, as it failed to surpass multiple hurdle of last nine weeks at 10,985. Now if index sustains below 10,880 then it may drift towards 50-DEMA and next major support at 10,777 and then 10,700.

On upside, hurdles are seen at 10,929 and then 10,985. The index has got stuck in a broader trading range of 10,700 to 10,985 and requires a decisive range breakout for next leg of rally. On options front, maximum Put open interest was at 10,500 followed by 10,800 strike, while maximum Call OI was at 11,000, followed by 10,900 strike.

Meaningful Call writing was seen at 11,000 followed by 10,900 strike, while Put unwinding was seen at most of immediate strikes.

Option band signifies a trading range between 10,700 and 11,000 levels. India VIX moved up by 0.58 per cent to 18.08 level.

Volatility has to cool down below 16 to get a decisive range breakout. Nifty Bank index finally broken its consolidation band of last five trading sessions from 27,350 to 27,600 zone and slipped towards 27,190 level.

It formed a bearish candle on daily chart, as supply pressure was visible at higher levels.

It has taken multiple hurdle at 27,600 zone and resistances were shifting lower.

Now index has to cross and hold above 27,350 zone to witness an up move towards 27,600 then 27,750, while immediate supports exist at 27,150 and then 27,000. Nifty futures fell 0.83 per cent to 10,845 levels.

Built-up of long positions were seen in Bata India, Sun Pharma, YES Bank and Wipro while shorts were seen in Grasim, TVS Motor, ITC and Mcdowell. (Chandan Taparia is Technical Derivative Analyst at MOFSL.

Investors are advised to consult financial advisers before taking an investment calls based on these observations)