Kshitij Anand Moneycontrol News
The Nifty failed to hold on to morning gains on Friday and closed marginally higher from its previous close making a ‘Spinning Top’ kind of pattern on the daily charts on Tuesday, ahead of market holidays.
The market will remain closed on Thursday on account of Balipratipada and will open for an hour-long trade on Wednesday evening for Laxmi Pujan.
The index which opened with a small gap on the higher side failed to hold on to the momentum and closed just 6 points higher at 10,530 on Tuesday. It hit an intraday high of 10600 and a low of 10,491 but then bulls managed to push the index above 10500 towards the close.
Bulls and bears locked horns in trade on Tuesday. A clear trend will emerge if the index breaks above 10600 on a closing basis or break down below 10440 this week, suggest experts.
“The Nifty continued its consolidation mode as it signed off the session with a Spinning Top kind of formation ahead of long holiday. In this process it also generated sell signals on lower time frame charts,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“Hence, further upsides for time being shall be capped around 10606 levels and unless Nifty decisively registers a breakout above the said level, excluding sentiment is driven muhurat session, bulls may not have much ground to cover on the upside. In other words, we can expect sideways move with negative bias in the next couple of trading sessions till 10440 on the downside is breached,” he said.
Mohammad advises traders to stay away from long side bets till Nifty registers a breakout above 10,600 on a closing basis. In such a scenario initial target of 10,710 can be expected.
India VIX fell down by 5.01 percent at 18.50 levels. However, till it does not hold below 16-16.50 zones upside seems to be capped in the market.
On the options front, maximum Put OI is placed at 10,000 followed by 10,200 strikes while maximum Call OI is seen at 10,700 followed by 11,000 strikes.
Put writing is seen at 10200 followed by 10600 strikes while Call writing is seen at 10,700 followed by 10,600. Option band signifies an immediate range from 10450 to 10650 zones for November expiry.
“The Nifty index opened positive but witnessed selling pressure in last hour of the trading session and managed to settle above 10500 zones. It formed an indecisive Candle on the daily scale as follow up is missing on either side as it has been consolidating between 10450-10600 from past three trading sessions,” Chandan Taparia, Derivatives and Technical Analyst at Motilal Oswal Securities told Moneycontrol.
“The index has to continue to hold above 10,450 zones to extend its up move towards 10,650 -10,750 zones while on the downside multiple supports are seen at 10,450 then 10,380 levels,” he said.
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