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Last Updated : Apr 16, 2019 07:21 PM IST | Source:

Technical View: Nifty forms bullish candle, ends at record closing high; next target at 12K

Mazhar Mohammad said sustaining above Tuesday’s gap zone of 11,731–11,704 levels one can remain positive and look for higher targets placed around 12,000 kind of levels.

Sunil Shankar Matkar

Nifty50 had a spectacular run on April 16 after consolidating for 12 previous sessions surpassing psychological 11,800 levels for first time and hitting a record high of 11,810.95.

Rally in private banks and positive Asian cues lifted sentiment.

The index ended at record closing high and formed bullish candle on the daily charts.

The breakout on the upside from its trading band of 11,550 to 11,760 zones after the consolidation of last twelve trading sessions indicated that the index could be on its way to hit 12,000 levels in coming sessions, experts said.

The Nifty50 after opening strong at 11,736.20 extended rally as the day progressed and hit a record high of 11,810.95 intraday. The index closed 96.80 points higher at 11,787.20.

"Last 8 days of sideways move between 11,761–11,550 appears to have proved to be a bullish consolidation as Nifty50 registered a positive candle with a strong gap-up opening which led to a fresh breakout above its life time highs," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, told Moneycontrol.

He said sustaining above Tuesday’s gap zone of 11,731–11,704 levels, one can remain positive and look for higher targets placed around 12,000 kind of levels.

Contrary to this, if Nifty registers a close below 11,700 levels then this bullish momentum shall fade away, he added.

For time being, he advised traders to ride this up move with a stop below 11,700 on closing basis and look for targets close 12,000 levels.

India VIX moved up by 2.27 percent to 21.87 levels.

Sudden spike in VIX indicates limited upside with volatile swing in the market but higher VIX could even support the market to continue its momentum as well being at new high territory, experts said, adding Option band signifies a shift in higher trading range in between 11,600 to 11,900 zones.

On the option front, maximum Put open interest (OI) is at 11,500 followed by 11,000 strike while maximum Call OI is at 12,000 followed by 11,800 strike.

Meaningful Put writing is at 11,800 followed by 11,700 strike while minor Call writing is at 11,850 strike.

"Nifty index has been making higher highs - higher lows from last three trading sessions and needs to hold above 11,720 zones to extend its momentum towards 11,888 then 12,000 zones while on the downside support is seen at 11,666 then 11,550 levels," Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.

Bank Nifty opened gap up and gradually extended its gains towards 30,600 zones. The index closed 427.10 points higher at 30,531.35 and formed a strong bullish candle on daily scale.

"The index is making higher highs - higher lows from past three sessions. Supports are shifting higher and now it has to continue to hold above 30,250 zone to witness an upmove towards its previous life time high of 30,648 then 31,000-31,250 zones while on the downside major support is seen at 30,000 levels," Chandan Taparia said.

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First Published on Apr 16, 2019 05:05 pm
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