The Nifty started the April series and also ended the financial year 2022-23 on a high, with the benchmark index clocking the biggest single-day rally since November on broad-based buying and uptrend in Asian counterparts.
The index had a strong gap-up opening at 17,210 and stayed above the 17,200 mark throughout the session to touch the day’s high of 17,382. It ended the day at 17,360, the highest closing since March 10, up 279 points or 1.63 percent.
The rally also helped the Nifty post the biggest weekly gains since July 2022 and turn positive for the last month of FY23.
The index formed a long bullish candlestick on the daily and weekly charts, while there was a High Wave formation on the monthly timeframe, especially after the Three Black Crows formation in the previous three months.
Given the strong closing above the 13-day consolidation and break out above 17,250, which acted as a strong hurdle in recent consolidation, the index is expected to face the next resistance at around 17,500, which coincides with the 200-day exponential moving average (EMA), with crucial support of 17,000-16,800 in coming sessions, experts said.
"On the daily chart, the index has moved above the recent consolidation, suggesting a rise in optimism. The momentum oscillator RSI (relative strength index) has entered a bullish crossover," Rupak De, Senior Technical Analyst at LKP Securities said.
The trend will remain strong as long as the index remains above 17,200. On the higher end, the next important level is 17,500–17,600, where bears will be waiting, he said.
The weekly Option data indicated the highest Call open interest at 17,700 strike followed by 17,500 and 17,600 strikes, with Call writing at similar strikes, which is expected to be the crucial resistance area for the Nifty.
On the Put side, the maximum Put open interest was at 17,000 strike, the expected crucial support area, followed by 17,300 and 17,200 strikes, with writing at 17,300 strike, then 17,200 strike.
Banking index
The Bank Nifty opened gap-up by more than 300 points and rallied nearly 700 points to close at 40,609. It formed a strong bullish candle on daily and weekly scales and a high wave pattern on the monthly timeframe.
It has also negated lower highs on the weekly scale after two weeks. Now it has to hold above 40,400 to make an up move towards 40,850 then 41,250. On the downside, supports shifted to 40,250 then 40,000 levels, Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
Volatility dropped to its lowest in three weeks. The India VIX, which points to expected volatility over the next 30 days, declined 5.08 percent from 13.63 levels to 12.94 levels.
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