Index has got stuck in between 10,923 to 11,078 zones from last eight trading sessions and requires a range breakout to commence the next leg of rally, experts said.
The Nifty50 after opening flat gained strength in the morning trade itself and reclaimed psychological 11,000-mark despite tepid global cues.
The index managed to hold the same level at close, forming small bullish candle on the daily charts and Doji Cross kind of pattern on the weekly scale.
A ‘Doji’ is formed when the index opens and then closes approximately around the same level but remain volatile throughout the week which is indicated by its long shadow on either side. It appears like a cross or a plus sign.
Index has got stuck in between 10,923 to 11,078 zones from last eight trading sessions and requires a range breakout to commence the next leg of rally, experts said, adding the flat close on week on basis with a Doji candle which indicates a tug of war while decline is being bought in the market.
The 50-share NSE Nifty opened at 10,963.50 and touched an intraday low of 10,946.20, but managed to gain strength in the first hour of trade itself and moved up to hit day’s high of 11,030.25. The index closed 53.10 points higher at 11,010.20.
“Nifty50 continued its rangebound move as it bounced back with a bullish candle from the lower end of the trading range present between 10,925–11,080 levels where as on the weekly charts it registered a Doji Cross kind of formation suggesting indecisiveness and lack of direction throughout the week,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
He said unless indices emerge out of this trading range as directional move can’t be expected in the Nifty50. “However, traders can maintain long bias and focus on stock specific opportunities as market started recoginising and rewarding the companies which delivered good numbers and at the same time punishing the ones who failed to meet the expectations.”
Traders are advised to maintain a market stop, for all long positions, below 10,900 on closing basis, Mohammad said.
India VIX fell by 1.10 percent at 13.44 levels. VIX has to cool down to start the fresh leg of rally to head towards life time high territory, experts said.
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 11,000 strike.
Meaningful Put writing was seen at 10,900 followed by 11,000 whereas Call Unwinding was seen at all the immediate strikes. Option band signifies an immediate trading range in between 10,929 to 11,080 zones, experts feel.
“Nifty index managed to hold support near to 10,950 zones and recovered to 11,030 levels. It has recently given a breakout above 10,929 and sustain buying interest is visible at those crucial support levels from last five consecutive trading sessions. It formed a small Bullish candle on daily while a Long Legged Doji on weekly scale which indicates that decline is being bought in the market,” Chandan Taparia, Associate Vice President | Analyst-Derivatives, Motilal Oswal Securities told Moneycontrol.
He said now the index has to continue to hold above 10,950 zones to extend its gains towards 11,080 then 11,171 levels while on the downside supports are seen at 10,929-10,925 zones.
Bank Nifty remained rangebound for the most part of the trading session in between 26,700 to 26,950 zones. It is finding hurdle near to 27,000 zones while major support exists near to 26,650 levels.
Taparia said it has to continue to hold above 26,750 zones to witness an up move towards 27,000 then 27165 while on decline major support is seen at 26,650 then 26,400 and lower levels.
