Where are Nifty, Bank Nifty headed after breaking out above key levels; check support, range

“Nifty looks bullish on the daily charts but is also getting into a slightly overbought zone with strong resistance now at 20,195. Investors should book profits at current levels as daily close below the support of 19,956 could lead to the target of 19,700 in the near term," said Ramachandran.

"With aggressive put writing in the 20,000 and 19,950 strikes, we believe the 19,930–19,950 zone could serve as a strong support. As long as this level holds, the index may continue its upward movement towards the 20,100–20,150 levels," said Sudeep Shah, Head of Technical and Derivative Research at SBI Securities.

Avdhut Bagkar, Derivatives & Technical Analyst at StoxBox, stated, "A decisive surge over 20,000 has triggered a fresh upside in the Nifty index. The highest open interest is noted in the 20,000 PE, 19,950 PE, and 19,900 PE, indicating strong support near the 19,950 mark. For today, Nifty may see accumulation if any selling pressure emerges near 20,100–20,070."

Bagkar added, "On the upside, the next breakout exists at 20,150. An aggressive move beyond this level could propel Nifty towards the 20,300 mark."

Bank Nifty breaks free of strong resistance; poised to rally to 45,000

The Bank Nifty has broken out above its crucial resistance mark of 44,100. “With the benchmark witnessing a good trend reversal on its daily charts, it seems poised for a rally towards 44,700 and 45,000. Immediate support is near the 44,000 mark, below which the next support would be around the 43,750 level. Any pullback towards this zone of 43,750 to 44,000 should offer a good buying opportunity on Bank Nifty," said Arora of Mehta Equities.

As per Motilal Oswal Financial Services, "Bank Nifty Index formed a strong Bullish candle on daily scale as buying was seen across the banking stocks. It continued its formation of higher highs - higher lows from the past four sessions and finally managed to surpass its crucial hurdle of 44444 marks. Now it has to continue to hold above 44444 for an up move towards 44750 then 45000 levels while on the downside support is seen at 44444 then 44250 zones."

Weekly derivative data overview

In the weekly series, Nifty 50 derivative open interest (OI) data indicates significant call writing in the 20,000 and 20,200 strikes. On the puts front, there were notable OI additions in the 19,900 and 20,000 strikes.

Market analysis and VIX movement

For the first time yesterday, the Nifty index closed in the gap zone around 19,900, created in the third week of September. This is noteworthy as it faced four price rejections over the past six weeks. Sudeep Shah of SBI Securities said, "Curiously, India VIX surged by more than 13 percent since yesterday, indicating a possibility that market participants are hedging their existing long positions with index options ahead of the exit poll and the actual results of the five state elections later this week."

Overall, the range for the day could be 19,930–19,950 on the downside and 20,080–20,100 on the upside, he said.
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