Moneycontrol
Last Updated : May 25, 2018 05:54 PM IST | Source: Moneycontrol.com

Technical View: Nifty50 forms a bullish candle; 10,524 crucial for bulls in the coming week

India VIX fell down up by 4.46 percent at 12.55 levels. On the options front, maximum Put OI is intact at 10,500 followed by 10,400 strikes while maximum Call OI is placed at 10,800 followed by 11,000 strikes.

Kshitij Anand @kshanand

Bulls charged on D-Street from the word go as they helped Nifty50 to climb 10,550 as well as 10,600 levels on closing basis. The index which made a bullish candle on the daily charts formed a Hammer-like pattern (not exact) on the weekly charts.

The Nifty50 is now trading above its crucial short-term moving averages and today’s intraday low of 10,524 will be of big importance in the coming week, suggest experts. A break below this level could again put further pressure on the index amid expiry week volatility.

On the upside, the next target for the index is placed at 10,733 levels but bulls will be able to take full control of the index if it surpasses 10,929 which was recorded on May 15, 2018.

The Nifty50 which opened at 10,533 slipped marginally to hit an intraday low of 10,524. Bulls took control of the index and pushed Nifty above 10,600 to hit an intraday high of 10,628 before closing the day at 10,605, up 91 points.

“It was heartening to see bullish Hammer formation on weekly charts as markets recouped 100 percent of the losses witnessed in the first three sessions of the week with back to back strong bullish candles of last two sessions. This V-shaped recovery on an accelerated path, after hitting a low of 10,417, is raising hopes of a bottom around 10,417 levels,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

“Though, it will be too early to conclude that bottom is in place at recent low but the same will be confirmed if Nifty50 get past 10,929 by next 4 sessions which also coincides with current month expiry,” he said.

Mohammad further added that traders are advised to take a cautious stance if Nifty slips below 10,524 levels in next 2 sessions. On oscillators front, MACD shied away with an uptick from its equilibrium line on daily charts and this kind of behaviour is usually regarded as a strong bullish sign. The current upmove can initially expect to get extended up to 10,733 levels.

India VIX fell down up by 4.46 percent at 12.55 levels. On the options front, maximum Put OI is intact at 10,500 followed by 10,400 strikes while maximum Call OI is placed at 10,800 followed by 11,000 strikes.

Meaningful Put writing is placed at 10,600 and 10,500 strikes which could act as a strong support while Call unwinding is seen at immediate strike prices which give room for further upside.

“Options data suggests a shift in a trading range between 10,500 and 10,700 zones. The Nifty index opened flattish and witnessed sustained buying throughout the trading session. It formed a Big Bullish Candle on daily scale followed by Dragon Fly Doji on a weekly scale which suggests buying is visible at lower levels in the market,” Chandan Taparia, Derivatives, and Technical Analyst at Motilal Oswal Securities told Moneycontrol.

“Now, till it holds above 10,550, it could extend its gains towards 10,680 and then towards 10,725 zones, while on the downside supports are seen at 10,550 and then towards 10,500 levels,” he said.
First Published on May 25, 2018 05:54 pm
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