Bulls took control of D-Street from the word go on May 16 thanks to stable cues and recovered most of the losses seen in the week. They pushed the index back above 11,250 which is the 100-day exponential moving average (EMA), which is a positive sign.
Nifty respected 100-day moving average placed at 11,138 for the fourth consecutive day in a row to reclaim 100-day and 5-day EMA. However, for the bulls to completely take charge, the index has to close above 11,300 convincingly, suggest experts.
The Nifty50 that opened at 11,180 hit an intraday low of 11,143 and bounced back. It climbed above 11,200 to an intraday high of 11,281 before closing the day at 11,279, up 122 points.
Broader markets underperformed – the S&P BSE Midcap index rose 0.27 percent while the Nifty50 gained 0.25 percent compared to 1 percent rally seen in the benchmark indices.
“Nifty appears to be on a consolidation mode as it signed off the session with a bullish candle without a follow through to the selloff witnessed on May 15. In fact, for last three sessions the said index appears to be carving out a 200 point trading range as it criss-crossed around its 100-day moving average,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“A close above 11,300 can propel the index towards 11,500, whereas a breakdown below 11,100 can drag it down towards 10,900,” he said.
Mohammad further added that as we are heading for a major event, and bulls appears to be lacking enough incentives to take higher risk and push the indices beyond 11,300. “Hence, traders are advised to remain neutral on the long side whereas intraday shorting can be considered on breach of 11,100,” he said.
India VIX fell by 1.01 percent to 28.37. However higher VIX suggests that volatile swings could continue in the market ahead of the election outcome.
Maximum Put OI was placed at 11,000 followed by 11,500 and maximum Call OI was placed at 12,000 followed by 12,500.
Call writing was seen at 11,300 followed by 11,500 whereas Put writing was seen at 11,000. Options band signifies a trading range of 11,000-11,500.
“Nifty remained highly volatile throughout the session and traded in a wider range of 11,140-11,280. It formed a bullish candle on the daily scale as it managed to regain the losses of the previous session and closed above crucial hurdle of 11,250,” Chandan Taparia, derivative & technical analyst at Motilal Oswal Securities told Moneycontrol.
“The index has to hold above 11,250 to extend its bounce towards 11,333, then 11,420 while on the downside support is seen at 11,188, then 11,118,” he said.
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