A close above 11350-11400 on the Nifty50 has opened room for the index to rally towards 11500 levels in the short term, suggest experts. However, selling pressure could continue in case the index closes below 11259.
Indian market extended gains in the last hour of the session on Friday to take the index above 11,400 levels on the Nifty while the S&P BSE Sensex had a touch and go moment with 38,000.
The Nifty 50 formed a bullish candle on the daily charts and a ‘Hammer’ like a candle on the weekly charts which suggest that we could have made an intermediate bottom. However, the confirmation of the trend will come depending on the candle formed on Monday.
The Nifty 50 recouped losses of the week in just one trading session as it closed with gains of 1.14 percent for the week ended May 17 ahead of exit call due on May 19.
A close above 11,350-11,400 on the Nifty 50 has opened room for the index to rally towards 11,500 levels in the short term, suggest experts. However, selling pressure could continue in case the index closes below 11,259.
The Nifty 50 which opened at 11,261 slipped marginally towards 11,259. It rose to an intraday high of 11,426, before closing the day at 11,407, up 150 points.
“The Nifty50 registered a strong bullish candle as it almost opened above its short term resistance points which also resulted in Hammer kind of formation on the weekly charts. In normal conditions this kind of strength shall eventually lead the index towards 11480 – 11,570 kind of levels,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“However, as the market is heading for a major event next week Monday’s price action is certainly going to be influenced by the exit poll of Sunday and based on that it can wildly move in either of the directions,” he said.
Mohammad further added that the market shall remain unpredictable for the next couple of sessions. “Nevertheless the positive outcome can extend the strength towards 11550 whereas any negative outcome may erase all the gains of 17th May by dragging down the index below 11250 levels,” he added.
India VIX fell down by 1.01 percent at 28.07 levels. However, the VIX is still trending at higher levels and a high VIX suggests that volatile swings could continue in the market ahead of Election polls and outcome.
On the options front maximum Put OI is placed at 11000 followed by 11500 strikes while maximum Call OI is placed at 12000 followed by 12500 strikes.
Call writing is seen at 11800 followed by 11,400 strikes while Put writing is seen at 11000 strikes. Options band signifies a wider trading range in between 11000 to 11550 zones.
“The Nifty index opened flattish but gradually extend its gains and surged by 150 points to close above 11,400 zones ahead of the Exit Poll Outcome. It formed a Big Bullish Candle with a reversal of Harami formation on the daily scale as sustained buying interest was seen throughout the session,” Chandan Taparia, derivative & technical analyst at Motilal Oswal Securities told Moneycontrol.“Now, it has to hold above 11,350 zones to extend its gains towards 11,500 then 11,550 zones while on the downside supports are seen at 11,250 then 11,180 zones,” he said.