Kshitij Anand Moneycontrol News
The Nifty50 which reclaimed its crucial level of 9,800 with a gap-up opening on Wednesday closed slightly below its next crucial resistance level of 9,900 which made a bullish candle for the second straight day on the daily candlestick charts.
A bullish candle formed on the daily chart for the second consecutive day in a row signifies that the market witnessed sustained buying interest from the Bulls for the most part of the trading day which is a bullish sign.
The Nifty50 index managed to hold 9,775 levels and witnessed a strong rally of more than 100 points towards 9,900 zones. If the index sustains above 9,850 this week or month, chances of a bounce back towards 9,980-10,000 is possible.
However, investors are still advised to take gains with a pinch of salt as it would be difficult for the index to surge past its record high of 10,137 in a hurry.
The Nifty50 opened at 9825.85 and then slipped marginally to touch its intraday low of 9,773.85. It rose to an intra-day high of 9903.95 before closing the day 103 points higher at 9,897.30.
“The bulls made a strong come back as Nifty50 continued its pullback into second trading session. As momentum appears to be on the forefront once again across the global markets, this rally may well get extended up to 9970 – 10,046 levels,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“However, this strong pullback should never be read in isolation as the pace of recent correction on relatively higher volumes is suggesting that the indices might have formed atleast a multi week top around 10137 levels and hence it is not going to be that easy for the bulls to get past 10,137 levels without undergoing a proper time wise correction,” he said.
Traders to lighten up their positions as we reach the zone of 9,950 – 10,050 levels in their own best interest, said Mohammad.
On the options front, maximum Put OI shifted back to 9,800 followed by 9,500 strikes while maximum Call OI is at 10,000 followed by 10,100 strikes.
Significant Put writing was seen at 9800, 9900, 9700 and 9600 strikes which are supporting this up move while Call unwinding in 9700, 9900 and 10050 strikes could give the scope to head towards its psychological 10000 zones.
“The Nifty formed a strong Bullish candle on the Daily chart and started to form higher highs – higher lows from last two sessions,” Chandan Taparia, Derivatives and Technical Analyst at Motilal Oswal Securities told Moneycontrol.
“It has surpassed its 38.20% retracement of recent fall from 10,138 to 9,685 and now a hold above 9,850 could extend its move towards 9,928 and then towards 9,980-10,000 zones,” he said.
Taparia further added that on the downside it has support at 9,820 and then towards 9,775 mark to hold the recent pull back rally.
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