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Last Updated : May 27, 2019 05:23 PM IST | Source: Moneycontrol.com

Technical View: Nifty forms bullish candle, profit booking likely if index falls below 11,900

On the options front, maximum Put open interest (OI) is at 11,000 followed by 11,700 strike while maximum Call OI is at 12,500 followed by 12,000 strike.

Sunil Shankar Matkar

Driven by banking and metals stocks, Nifty closed above 11,900 levels and formed a bullish candle on the daily charts.

The index rallied 80.70 points higher to end at record closing high of  11,924.80 and is 116 points away from its life-time high of 12,041 levels.

Close

"Nifty50 continued its positive momentum as the index closed at new life time highs before signing off the session with a bullish candle. However, on intraday basis, it remained in a narrow range of around 40 points in last 4 hours of the session between 11,950–11,910 which can be a cause for concern in next session," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in, told Moneycontrol.

He said on intraday basis if the index trades below 11,900 in next session, for atleast 30 minutes, then it can undergo profit booking with initial targets of 11,812 below which slightly larger correction can kick in.

Contrary to this if index manages to sustain above 11,957 levels then it can extend its strength to test election day high of 12,047 levels, he added.

He also advised traders to focus on stock specific opportunities.

India VIX fell further by 1.70 percent to 16.19 levels.

Decline in VIX suggests that short-term stability and formation of higher base is being seen in the market, experts said, adding that option band signifies a trading range between 11,600 to 12,100 zones.

On the options front, maximum Put open interest (OI) is at 11,000 followed by 11,700 strike while maximum Call OI is at 12,500 followed by 12,000 strike.

Put writing is at 11,800 followed by 11,900 strike while minor Call writing is at 12,300 then 12,100 strike.

"Nifty index formed a bullish candle with higher lows on daily scale but traded inside the trading range of election result day. Now it has to continue to hold above 11,850 zone to extend its move towards 12,000 then 12,040 zones while support is seen at 11,761 levels," said Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.

Bank Nifty has been making higher lows from last seven consecutive sessions and managed to close near its life-time high territory of 31,650-31,700 zones.

The index closed 435.10 points higher at 31,647.65 and formed a bullish candle on daily scale as sustained buying interest was seen throughout the session.

"Now Bank Nifty has to hold above 31,150 zone to extend its move towards new life time high of 32,000 then 32,250 levels while major support exists at 31,000 then 30,500 zones," said Taparia.

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First Published on May 27, 2019 04:29 pm
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