Technical View: Nifty hits fresh record highs ahead of Christmas! forms bullish candle

The bulls took charge of D-Street from the word go on Friday after consolidating in a narrow range for the past two trading sessions ahead of holidays. Indian market will remain shut on Monday on account of Christmas.

The index breached 10,500 on the upside for the first time to hit its fresh record high of 10,501.10 in the last 30-minutes of trade.

The index formed a robust bull candle after two bearish candles which is a bullish sign. The bulls are in control of D-Street and investors should remain long with a stop loss below 10,426 levels.

The Nifty50 index which opened at 10,457 rose to a fresh record high of 10,501.10. The index slipped marginally towards 10,448.25 before closing 52 points higher at 10,493.

“The Nifty50 registered a robust bull candle on weekly charts as it recovered from last two trading sessions of consolidation mode. Besides, it also appears that the strong bullish candle of the week has erased entire losses of last 5 weeks in one single attempt which should be read as a very positive technical development,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

“Hence, as long as indices sustain above 10,426 levels one can maintain a positive outlook and look for initial target placed in the zone of 10,600–10,650 levels in next couple of trading sessions,” he said.

Mohammad advises traders to maintain a tight stop below 10,426 levels on a closing basis as a breach of this level shall once again put bears in an advantageous position.

India VIX fell down by 4.06 percent at 11.58. India VIX has fallen down by 22.44 percent in the last five sessions and needs to hold below 12.50 zones to get the smooth ride.

On the options front, maximum Put open interest was seen at 10000 followed by 10400 strikes while maximum Call OI is at 10500 followed by 10600 strikes.

Fresh Put writing was seen at 10,400, 10,450 and 10,500 strikes while fresh Call writing is seen at 10,550 and 10,650 strikes.

“Shift in Put writing, as well as Call writing to a higher strike, suggests shifting of the support. Option band signifies a broader trading band between the range of 10,400 to 10,600 for next coming sessions,” Chandan Taparia, Derivatives, and Technical Analyst at Motilal Oswal Securities told Moneycontrol.

“The Nifty has given the highest daily close with the intraday gains of around 50 points. Now, Nifty has to continue to hold above 10,450 zone to extend its move towards 10,550 then 10,600 zones while on the downside supports are seen at 10,400 zones,”