See Nifty heading to 6600-6700 in short-term: Fortune Eq

Ashish Chaturmohta
Fortune Equity Brokers

Nifty index has formed an important Double Bottom formation on its daily chart around 5970 levels and has given a strong breakout above its neckline which is seen at 6212 levels forming a Breakaway Gap and sustained above it with firm volumes, indicating strength in the breakout with positive bias.

As mentioned in last week’s article, I had mentioned of potential targets towards 6450-6500 levels possible if the index sustains above 6212 levels which we are likely to see Nifty heading towards 6500 levels today with a strong gap up opening and see a fresh all time high levels. Ideally, whenever a new high is made fresh buying participation with strong momentum is seen and can see another 5-7% upside move from high levels. Considering the strong gap up opening, now on the downside 6340 levels would act as an important support, till it sustains above these levels we may see Nifty heading towards 6600-6700 levels in short-term.

Stocks like ICICIBANK, HDFCBANK, M&M, LT, SIEMENS, BANKBARODA, RELCAPITAL, etc are looking positive at current levels and may outperform the market.

The FIIs activity in the Index Options since the start of the series has been eye-catching as the net inflows is seen to the tune of Rs.4500cr and if we relate these inflows with the PCR OI which has been falling consistently and currently working inversely with Nifty, clearly indicates the FIIs inflows is more concentrated towards call option buying activity, where the open interest in OTM options 6400 to 6600 strike prices has increased consistently.