Moneycontrol
May 15, 2017 04:54 PM IST | Source: Moneycontrol.com

Tech View: Nifty forms a small bullish candle; avoid adding fresh long positions

The emphasis at this juncture should be placed on preserving the profits rather than trying to make money by creating fresh long positions unless there is a compelling buying opportunity.

Tech View: Nifty forms a small bullish candle; avoid adding fresh long positions

Kshitij Anand

Moneycontrol News

The Nifty which opened with a slight gap on the upside came within a kissing distance of previous record high of 9,450 hit last week and made a small bullish candle on the daily candlestick charts.

The market is trading near key resistance levels which make some analysts’ a bit cautious at current levels. Investors are advised not to initiate any fresh long positions at current levels and keep a stop loss below 9,372 levels.

A short bull candle is formed when the closing level is higher than the opening level but moved in a narrow range throughout the trading day.

The Nifty opened at 9,433.55 and rose to an intraday high of 9,449.25. It slipped to an intraday low of 9,423.10 but finally closed 44.50 points higher from its previous close at 9,445.40.

The Nifty almost erased losses of the last two trading sessions before signing off the day by registering new lifetime highs on closing basis suggesting that bulls are in no mood to give up their bullish bets, suggest experts.

“Dips are being considered as an opportunity to create long positions. The next logical target for this market appears to be placed around 9,550 levels which is pretty much possible before this expiry itself,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.com.

“However, considering the overbought nature of the market on longer time frame charts bulls are advised to remain cautiously optimistic and ride this rally for the said targets with a stop below 9,372 on a closing basis,” he said.

The emphasis at this juncture should be placed on preserving the profits rather than trying to make money by creating fresh long positions unless there is a compelling buying opportunity.

On the options front, maximum Put OI was seen at strike prices 9,300 followed by 9,400 while maximum Call OI was seen at strike prices 9,500 followed by 9,400.

Fresh Put writing was seen at strike prices 9,400 which is shifting its support to higher zone is supporting the bullish sentiment while intact Call writing at 9500 is restricting its upside momentum.

“The Nifty index opened positive and headed towards its lifetime high of 9,450. However it traded in a range of 20 points for the most part of the day but buying interest was seen in the market after the consolidation of last two sessions,” Chandan Taparia, Derivatives, and Technical Analyst at Motilal Oswal Securities told Moneycontrol.com.

“It registered a highest daily close and now needs to hold above 9,420 zone to extend its up move towards 9,500 and 9,550 while on the downside major support is seen at 9,380,” he said.
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