Technical View | Nifty clocks biggest single-day gain in 3 months. Next stop 19,500?

Bull Market

The Nifty started the July series on a robust note, reporting the biggest single-day gains in three months to close at a new high on June 30, with all sectors but metals fuelling the climb.

The index opened above 19,000 and moved higher as the day progressed to hit a new high of 19,201.70. It trimmed some of the gains to end 217 points, or 1.14 percent, up at 19,189, its best closing aided by the biggest single-day gains since March 31.

The index formed a bullish candlestick on the daily charts and a long bullish candlestick pattern on the weekly scale, making higher highs, higher lows for the 14th straight week.

The index gained 2.8 percent during the week and 3.53 percent in the month.

The next key resistance levels would be 19,300-19,500, with support shifting higher to 19,000 followed by 18,900-18,800, experts said.

Momentum indicators, too, looked strong, with the relative strength index (RSI) showing a positive crossover on all timeframes.

"A long bull candle was formed on the daily chart with gap-up opening, which is for the third consecutive sessions. The opening upside gaps of the last two sessions are unfilled. As per the gap theory, this pattern could be considered as a runaway gap, which reflects uptrend continuation pattern in the underlying," Nagaraj Shetti, Technical Research Analyst, HDFC Securities, said.

A long bull candle during upside breakout on the weekly charts signal the resumption of sharp up trend, he said. "The near-term uptrend of the Nifty remains intact and one may expect the Nifty to reach up to 19,500 levels in the coming week. Immediate support is at 19,050 levels," Nagaraj Shetti said.

As per weekly Options data, the maximum Call open interest was at 19,500 strike, indicating the possibility of more upside, followed by 19,200 strike, the near-term resistance for the index, with Call writing at 19,400 strike, then 19,200 strike.

On the Put side, the maximum open interest was at 19,000 strike, expected to be the immediate support, followed by 19,100 strike, with meaningful writing at 19,100 strike, then 19,000 strike.

Bank Nifty

Apart from Nifty IT, Bank Nifty also supported the rally, hitting a fresh intraday high of 44,787. The index rallied 420 points or 0.95 percent to close at a new high of 44,747 and formed a small-bodied bullish candlestick on the daily charts.

For the week, it was up 2.6 percent and formed a bullish candlestick pattern after five-week consolidation.

"On the weekly chart, the index has given a downwards consolidation breakout, suggesting a rise in optimism. Therefore, the trend looks positive for the short term," Rupak De, Senior Technical analyst at LKP Securities said. Immediate support is at 44,500, while resistance is at 45,000, he said.

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