Meaningful Put writing was seen at 11,000 followed by 11,100 whereas Call unwinding was seen at all the immediate strikes.
The Nifty50 after opening above 11,000-mark rallied sharply to hit a fresh six-month high and closed around the same level, forming bullish candle on the daily charts on Monday.
The winning of no-confidence motion by Narendra Modi government in the Lok Sabha and cut in GST rates for several products boosted investors’ sentiment.
The 30-share BSE Sensex ended at record closing high of 36,718.60, up 222 points while all sectoral indices also finished in the green barring IT.
The broader markets outperformed frontliners with the Nifty Midcap index rising 1.1 percent but despite positive sentiment, more than 300 stocks hit 52-week lows today.
The Nifty50 opened at 11,019.85 and gained further strength in later part of the session to hit six-month high of 11,093.40. The index closed 74.60 points higher at 11,084.80.
The index surpassed immediate hurdle of 11,080 and given a highest daily close since January 29. Now the index is less than 100 points away from record high and to touch that highest ever point, it has to hold decisively the next hurdle of 11,100, experts said.
“Finally it is looking like a breakout on Nifty50 as bulls signed off the session in style with a bullish candle and registered a close above its consolidation range between 11,080–10,925 levels. This range breakout itself is throwing up a fresh target of 11,241,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
However, the initial target can be projected as test of life time highs placed around 11,171 where some selling pressure can be expected which should eventually get absorbed and then pave the way for bigger targets placed around 11,241, he said. “Hence, traders are advised to go for fresh long positions with a stop below 11,000 on closing basis and look for bigger targets.”
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan said going ahead, 11,100-11,172 will be the key area to watch out for. “If the bulls manage to surpass that hurdle & sustain in the higher territory then the index can aim for significantly higher levels. The daily & weekly Bollinger Bands are in expansion mode thus creating room for the index on the higher side.”
On the flip side, the swing low of 10,925 shall pose as a crucial support for the short term, he feels.
India VIX fell by 4.32 percent at 12.95 levels. Decline in VIX has given the comfort to bulls with fresh consolidation breakout.
On the option front, maximum Put open interest (OI) was seen at 11,000 followed by 10,900 strike while maximum Call OI was at 11,100 followed by 11,200 strike.
Meaningful Put writing was seen at 11,000 followed by 11,100 whereas Call unwinding was seen at all the immediate strikes.
Option band signifies an trading range in between 10,950 to 11,171 zones, experts said.
“The index formed a Bullish candle and also given a consolidation breakout from its trading range of last nine sessions. Now it has to hold above 11,000-11,020 zones to extend its gains towards lifetime time high of 11,171 level while on the downside supports are seen at 10,950-10,929 zones,” Chandan Taparia, Associate Vice President | Analyst-Derivatives, Motilal Oswal Securities told Moneycontrol.
Bank Nifty recovered well from its intraday low near 26,670 and finally settled above 27,000 zones, rising 0.5 percent to 27,008.15.
Taparia said it formed a Bullish candle with long lower shadow on daily scale which suggests that decline is bought into this index.
It has to continue to hold above 27,000 zones to witness an up move towards 27,165 then 27,400 while on the downside support are seen at 26,750 then 26,650 levels, he added.
