The Nifty50 surpassed the 13,800 level on December 28 to hit a fresh record high of 13,885 in intraday trade, tracking positive global cues. The index formed a bullish candle and continued to form higher highs and higher lows for the fourth consecutive session.
The Nifty, which started with a gap on the upside above 13,800, hit 13,885.30. It saw some profit-taking to slip towards 13,800 to hit an intraday low of 13811. Strong buying support at lower levels, however, helped the index to close 123 points higher at 13,873.
Experts are of the view that the momentum remains intact as long as the index trades above the day's low of 13,811 in the coming session, opening the door for the index to hit 14,000 in the near term.
The Nifty opened the week on a strong note with a very favourable advance-decline ratio hinting at a broad-based market rally, though the trading range for the day remained at 74 points.
“The Nifty needs to sustain above the 13,811-mark in next trading session and in that scenario, market rally shall initially expand towards around 14,020 levels and beyond that 14,200 can’t be ruled out,” Mazhar Mohammad, Chief Strategist–Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
If the Nifty slips below 13,811, then some intraday weakness can be expected, he said. For the time, as there are no apparent sell signals on charts, traders should buy the index on any minor weakness in the first 30 minutes of the trade, with a stop below 13800 levels and look for a target of 14k levels, Mohammad said.
India VIX moved up by 2.77 percent from 19.96 to 20.42 levels. Stability in volatility is supporting the bullish market setup and VIX needs to hold below 19 zones for the bulls to be in control.
On the options front, the maximum Put OI is placed at 13000 followed by 13500 strikes while the maximum Call OI is placed at 14000 followed by 14500 strikes.
Call writing is seen at 14500 and then towards 14200 strikes, while meaningful Put writing is seen at 13,800, and then towards 13700 strikes.
“Option data suggests an immediate trading range between 13,700 and 14,100 zone. It formed a bullish candle on the daily scale and making higher lows from the last four sessions,” Chandan Taparia, Vice President - Analyst-Derivatives, Motilal Oswal Financial Services Limited told Moneycontrol.
“Now, it has to continue to hold above 13,750-13,777 zones to witness a fresh rally towards new life-time high of 14,000 then 14,200 zones, while on the downside, major support exists at 13,700 and 13,600 levels,” he said.
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