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Last Updated : Jul 17, 2019 07:06 PM IST | Source: Moneycontrol.com

Technical View: Nifty forms Spinning Top pattern, 11,700 crucial for further upside

Short-term traders are advised to remain neutral on the index, said Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in.

Sunil Shankar Matkar

Nifty remained rangebound with a positive bias and closed marginally higher on July 17 despite weak global cues.

The index traded in an extremely narrow range of 55 points as it tested its 50-day exponential moving average (11,689) and ended the session with a small bullish candle which resembles a Spinning Top kind of formation with equal shadows in both the directions.

Close

Experts feel unless the Nifty crosses and sustains above 11,800 level, the trend may not decisively favours bulls.

India VIX moved up by 2.08 percent to 11.80 levels. Lower volatility suggests stability with limited trading band in the market for next coming sessions.

After opening moderately higher at 11,670.75, Nifty touched an intraday high of 11,706.65 and low of 11,651.15. The index settled at 11,687.50, up 24.90 points from last close.

"The said index appears to be in need of a strong close above the 11,700 mark which can then facilitate the extension of upmove towards its critical resistance zone of 11,772–11,798 which was formed due to bearish gap down opening on July 8. Unless this gap is filled and Nifty sustains above 11,800 levels trend may not decisively favour bulls," Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in, told Moneycontrol.

He said contrary to this in next session if Nifty breaches and sustains below 11,650 kinds of level for one hour then it can attract further selling pressure on intraday basis with a initial target of 11,573.

As Nifty looks directionless for the time being, short-term traders are advised to remain neutral on the index and should wait for a strong close above 11,700 level before initiating long positions, Mazhar added.

On the options front, maximum Put open interest (OI) is at 11,600 followed by 11,300 strike while maximum Call OI is at 12,000 followed by 11,800 strike.

Put writing was seen at 11,600 and 11,400 strike while minor Call writing is at 11,750 followed by 11,800 strike price. Option data suggests a trading range in between 11,500 to 11,800 zones.

Bank Nifty managed to hold above 30,550 level and witnessed recovery towards 30,800 levels. The index closed 164.70 points higher at 30,735.50 and formed a small bullish candle with the follow up of previous day's Inside bar formation.

"This kind of pattern suggests near term stability and respect of immediate support zones. Now the index has to hold above 30,600 to witness a bounce towards 31,000 level while on the downside supports are seen at 30,500 then 30,250 zones," Chandan Taparia, Associate Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.

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First Published on Jul 17, 2019 06:55 pm
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