Kshitij Anand
The Nifty50 bounced back after hitting its 50-days exponential moving average placed at 10,562 on Wednesday to close above its crucial resistance level of 10,600. It made a bullish candle on intraday basis because the closing level was higher than the opening level.
The Nifty50 which opened at 10,579 rose to an intraday high of 10,648 before bears took control and pushed the index below 10,600. The index touched an intraday low of 10,558 before closing the day at 10,614.35, down 18.95 points.
The index witnessed a sharp recovery post 1 PM but the index still closed in red but above its opening levels which made a bullish candle on the daily charts even though the Nifty50 closed nearly 19 points lower.
Technical chartists advise investors to remain cautious ahead of the expiry and wait for the index to close above 10,700-10,717 levels for the momentum to continue. However, a breach of 10,550 on the downside could take Nifty towards 10,480 levels, suggest experts.
“Wednesday’s intraday price behaviour was quite encouraging for bulls as bears failed to capitalise on the gap-down opening as Nifty50 smartly recoiled, after testing its 50 day exponential moving average, to sign off the session around higher end of intraday trading range with a bullish candle on intraday basis,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“However, more strength and directional clarity in the index shall emerge if it manages to get past 10,717 levels on closing basis. In such a scenario higher targets close to 10,900 can be expected going forward,” he said.
Mohammad further added that contrary to this breach of 10,550 shall enhance selling pressure on the markets with initial targets placed around 10,480 kind of levels. “Traders are advised to focus on stock specific opportunities with a stop below 10,550 on a closing basis for long positions,” he added.
India VIX moved up by 2.16 percent at 13.41 levels. The Nifty50 index is flattish on expiry to expiry basis as April series closed at 10,617.80 and it is hovering near to the same zones.
VWAP of the entire series and week is placed at 10,680 and that is likely to act as an immediate hurdle. The Nifty index remained volatile in a broader trading range in between 10418 to 10929 zones but option writers kept their grip for the most part of the series.
“It has seen lower rollover compared to its last 6 months average while Roll Cost is very low comparatively which suggests a neutral market stance going forward,” Chandan Taparia, Derivatives, and Technical Analyst at Motilal Oswal Securities told Moneycontrol.
“The Nifty index opened gap down but managed to hold its support of 10,550 and bounced to 10,650 levels. However index remained highly volatile during the session ahead of F&O derivatives expiry,” he said.
Taparia further added that it formed a Bullish candle on the daily scale and got stuck in the grip of options writers. “The Nifty has to continue to hold above 10,550 zones to extend its gains towards 10,680 then 10,725 zones while on the downside supports are seen at 10,550 levels,”
he added.
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