Moneycontrol
Last Updated : Jun 12, 2018 05:43 PM IST | Source: Moneycontrol.com

Technical View: Nifty forms bullish candle; next resistance placed at 10,930

Bank Nifty managed to respect previous day’s low and gradually extended its gains towards 26,650 zones. It formed a Bullish Hammer Candle followed by multiple Dojis on daily scales.

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The Nifty which started with a gap-up build momentum and reclaimed 10,800 levels on Tuesday but failed to close above Monday’s intraday high of 10,850. It formed a bullish candle on the daily charts.

The index has to clear one big resistance level placed at 10,930 before it heads towards 11,000 and then to fresh highs. For bulls to remain in charge of the index it has to hold above 10,777 levels on closing basis.

The Nifty which opened at 10,816 rose to an intraday high of 10,856. It slipped to an intraday low of 10,789 before bouncing back towards 10,800 levels. It closed 55 points higher at 10,842.

Bank Nifty managed to respect previous day’s low and gradually extended its gains towards 26,650 zones. It formed a Bullish Hammer Candle followed by multiple Dojis on daily scales.

“Lack of follow through on the downside reinstated the bullish sentiment in markets, for time being, as the Nifty signed off the session with a bullish candle. However, based on larger trends it still appears that Nifty is staring at a critical resistance point of 10930 which can be a litmus test for bulls,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

“A breakout above 10,930 may pave the way for a retest of lifetime highs placed around 11,170 levels. Till then, markets shall remain vulnerable to bouts of volatility and breach of 10777 shall confirm short-term trend reversal in favour of bears,” he said.

Mohammad further added that at this juncture traders are advised to remain focussed on individual stock specific opportunities with a stop below 10,777 on a closing basis.

India VIX fell down by 3.41 percent at 12.73 levels. On the options front, maximum Put OI is placed at 10,600 followed by 10,700 strikes while maximum Call OI is placed at 11,000 followed by 10,900 strikes.

Significant Put writing was seen at 10,800 and 10,700 strikes which added 7 to 10 lakhs shares in outstanding position while Call writing was seen at 11,000 and 10,900 strikes.

“Option data suggests that supports are gradually shifting higher and an immediate trading range is likely to be in between 10,750 to 10,950 zones for next coming sessions. The Nifty index managed to take support at previous day’s closing levels and headed towards 10,856 zones by making the highest levels in last four months since 01st Feb 2018,” Chandan Taparia, Derivatives, and Technical Analyst at Motilal Oswal Securities told Moneycontrol.

“It formed a Bullish candle and negated the negative effect of a Doji candle of the previous session. Now it has to continue to hold above 10,770 zones to extend its move towards 10,888 then 10,929 levels while major supports are shifting higher at 10,777 then 10,720 zones,” he said.
First Published on Jun 12, 2018 05:43 pm
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