F&O Manual | Nifty holds on to gains but upside seems capped, resistance at 19,800

Stock Market Today

The benchmark Nifty50 bucked a weak global trend to open with minor gains on September 8. The bulls fought hard to keep the Nifty in the green territory but analysts see limited upside as the index faces resistance around 19,800 points.

The view was backed by options data, which showed both call and put writers being active at the 19,800 strike, suggesting a fight between the bulls and bears. On the other side, heavy put writing was also seen across 19,700 strikes followed by 19,750.

At 11.23 am, the Nifty was up 38.50 points or 0.20 percent at 19,765.50. The Nifty has closed higher for the past five sessions after declining more than 2 percent through August.

From a technical standpoint, Shrikant Chouhan, Head of Research (Retail), Kotak Securities, believes the Nifty could reach 19,775-19,800, which most analysts believe to be the immediate resistance.

A decisive move above that zone can push the index towards the previous high of 19,950-19,990 in the best-case scenario, Chouhan said. On the downside, a fall below 19,600 can trigger further correction towards 19,500.

"The recommended strategy is to buy Nifty if it corrects to 19,650-19,600 levels and keep a stop loss at 19,480," Chouhan said.

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For the first time in three weeks, the Nifty decisively moved past 19,700 and successfully reclaimed this crucial level.

“The Relative Strength Index (RSI) has shown a positive crossover, currently registering at 63, which emphasises a moderately bullish sentiment prevailing in the market," said Deven Mehta, Equity Research Analyst at Choice Broking.

Among individual stocks, PFC, REC, Havells and Tata Power saw strong long-buildup, while pharma stocks such as Glenmark, Zydus Life, Torrent Pharma and Lupin saw addition of short positions as traders chose to book profits after the recent surge.

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