The Nifty opened in the positive and then trended higher steadily throughout the day. But, profit-booking towards the closing trade saw the index settle closing off its highs on Wednesday.
The Nifty50 ended at 9,553. The broader market indices BSE Midcap and Smallcap underperformed the benchmark indices with a gain of 1 percent and 1.04 percent respectively for the day.
Though the Nifty50 has cleared the resistance of 9,400 levels, it continues to be in Bearish Rising Wedge pattern on the daily chart.
It (the pattern) would be negated once the Nifty50 starts to trade above 9,600 levels on a sustainable basis. In that case, the Nifty can rally towards 9830 and 9970 levels on the upside.
On the downside, if the Nifty50 breaks below 9300 levels, then it can see a deeper decline, as it would also confirm the breakdown of the ‘Wedge Pattern’. Thus, it can see a decline towards 9,100 and then towards 8,800 levels.
In Nifty May monthly expiry options, the maximum open interest for Put is seen at strike price 9,000 while Call maximum open interest is seen at 9500 and 10,000.
Since it is early it is early in the next series and open interest data is spread out to suggest any range. India VIX has seen major correction since March high of 86.6 to the current level of 34 which has been supporting the market in the up move.
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The stock has seen a major multi-year consolidation between 540 and 220 odd levels on the monthly chart. The last up move from the bottom end of the range has been on high volumes indicating accumulation at lower levels in the stock.
The recent correction from all-time of 569 has taken support at the 200-Days moving average around 400 odd levels. Also, in the process, the stock has retraced 61.8% Fibonacci retracement of the major rise from 254 to 569 levels.
On the short-term, the stock has formed a double bottom formation between 400 and 490 odd levels on the daily chart. Post the breakout price, it has retraced back to neckline level and formed a bullish pole and pennant continuation pattern on the daily chart.
Thus, the stock can be bought at current levels and on dips towards 485 with a stop loss below 470, and a target of 600 levels.
The stock is in a long-term uptrend forming a higher top and a higher bottom formation on the daily as well as on the weekly chart.
In the month of March, the stock witnessed a correction and then immediately bounced back after taking support around the 100-Day moving average.
The stock recently touched an all-time high of 18,500 on high volumes indicating buying participation in the stock.
After forming a bullish pole and pennant continuation pattern on the daily chart and now seeing a breakout. Thus, indicating resumption of the uptrend.
The relative strength index has given a positive crossover with its average on the daily chart. Thus, the stock can be bought at current levels and on dips towards 17750 with a stop loss below 17100, and a target of 20700 levels.
The stock has seen a sharp correction from the all-time high of 9950 in January this year and then touched a low of 4160 in late March. Since then, the stock has been trading at lower levels and retesting the low holding above the low.
For the last five weeks, the stock has been trading in a range of 5100 and 4300 odd levels. Volumes during this period have been high indicating buying participation in the stock at lower levels.
Stochastic has moved above the oversold levels on the weekly chart indicating the stock is likely to see bounce-back rally after consolidation. Thus, the stock can be bought at current levels and on dips towards 4925 with a stop loss below 4750, for a target of 5750 levels.
The stock has touched an all-time high of 408 in early February this year and then hit a low of 214 in late March. Here, the stock took support at its 200-Week Moving Average which has acted as support on the previous major decline as well.
The recent fall in the stock has been on below-average volumes compared to high volumes on the up move – which indicates a corrective decline in the stock.
Now, the bounce-back has crossed key Fibonacci retracement of 61.8% of the fall 408 to 214. The relative strength index has given positive crossover with its average on the weekly chart.
Thus, the stock can be bought at current levels and on dips towards 349, with a stop loss below 335, and a target of 410 levels.
The stock is in a downtrend forming a lower top and lower bottom on the daily as well as on the weekly chart. The stock broke the key support level of 90 and then hit a low of 73.
Subsequent bounce back to 100 levels is facing resistance. Volumes on the decline were high indicating selling pressure while the recent rally from the lows was on low volumes.
The relative strength index has given a negative crossover with its average on the daily chart. Thus, the stock can be sold at current levels and on the rise towards 92, with a stop loss above 95, and a target of 75 levels.
(The author is Head of Technical and Derivatives, Sanctum Wealth Management)Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.