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Last Updated : Sep 15, 2020 05:38 PM IST | Source: Moneycontrol.com

Technical View | Nifty forms small bullish candle; 11,570 crucial for upside

It looks prudent to focus on stck specific opportunites by avoiding long side bets on Nifty unless a strong close is witnessed above 11,570 levels, Mazhar Mohammad of Chartviewindia.in advised.

Sunil Shankar Matkar

The Nifty50 recouped previous day's losses to trade higher throughout the session and closed above 11,500 mark on September 15. Positive global cues, and buying in banks and IT stocks supported the market. The broader markets continued to outperform frontliners with Midcap and Smallcap indices rising over a percent each.

The index formed small bodied bullish candle on the daily charts as closing was higher than opening levels.


The Nifty50 has been in a range for last few sessions and hence unless the index decisively crosses 11,570 levels, the major upside is unlikely, experts feel.

For the time being, it looks prudent to focus on stck specific opportunites by avoiding long side bets on Nifty unless a strong close is witnessed above 11,570 levels, Mazhar Mohammad of Chartviewindia.in advised.

The Nifty50 opened higher at 11,487.20 and climbed further to hit an intraday high of 11,535.95. The index closed at 11,521.80, up 81.80 points.

"Lack of follow through to the last Monday's sell off is hinting that market slipped into a sideways phase as Nifty traded in a narrow range of 94 points. Though, at this point in time, larger trading range seems to be present between 11,600 – 11,200 levels, for next few trading sessions 11,570 – 11,383 appears to be critical short term levels to watch out for," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in told Moneycontrol.

He feels the weakness on intraday basis can be expected in next session if Nifty slips below 11,442 levels whereas a close below 11,383 can induce bigger weakness going forward.

Similarly if bulls manages a strong close above 11,570 levels then the decks to retest recent swing high of 11,798 will be cleared, he said.

India VIX declined by 2.80 percent from 21.19 to 20.59 levels.

Given the upside seen in today's session, Option data suggested that the Nifty could see a wider trading range of 11,300 to 11,700 levels in coming sessions.

On option front, maximum Put open interest was seen at 11,000 followed by 10,500 strike, while maximum Call open interest was at 11,500 followed by 12,000 strike. Marginal Call writing was seen at 12,000 then 11,800 strike while Put writing was seen at 11,500 then 11,300 strike.

Bank Nifty opened positive at 22,202.80 and slowly headed towards 22,500 levels as it managed to hold immediate support of 22,000.

The index settled 364.40 points or 1.65 percent higher at 22,465.70 and formed bullish candle which resembles an Inside Bar kind of pattern on daily charts.

"Bank Nifty has been hovering near to its 50 DEMA and requires to hold above the same to get a bounce or stability in the rate sensitive index. Now it needs to hold above 22,500 to witness some stability and a move towards 22,750 and 23,200 levels, however a hold below 22,000 could drag the rate sensitive index towards 21,750 and 21,500," Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.

Positive setup was seen in IndusInd Bank, Lupin, Aurobindo Pharma, UPL, Biocon, IGL, Mindtree, Amara Raja Batteries, Ramco Cement and Reliance Industries while weakness was seen in PNB, Indiabulls Housing Finance, ITC, BHEL etc, he added.

Disclaimer: "Reliance Industries Ltd. is the sole beneficiary of Independent Media Trust which controls Network18 Media & Investments Ltd which publishes Moneycontrol."
First Published on Sep 15, 2020 04:39 pm