Technical View | Bulls hold fort for third consecutive week, trend likely to be positive above 17,700

Nifty

The fight between bulls and bears ended finally in favour of the bulls as the Nifty50 recovered about 100 points from day's low and continued northward journey for ninth consecutive trading session on April 13.

The index opened moderately down at 17,807 and gradually erased gains to hit an intraday low of 17,730. However, the index showed smart recovery in later part of the session and climbed up to 17,842 before closing the session at 17,828, up 15.60 points.

The index has formed small bodied bullish candle on the daily charts with long lower shadow indicating support-based strong buying at lower levels, while it rallied 1.3 percent for the week and formed long bullish candlestick pattern on the weekly timeframe with making higher highs higher lows for third straight week.

Hence, psychological 18,000 mark is likely to be tested in coming sessions if the index manages to hold above 17,700 levels with momentum indicator RSI (relative strength index) showing positive crossover, whereas the crucial support remained at 17,500, experts said.

“The critical moving averages are sitting comfortably below the current index value. The trend is likely to remain positive as long as it stays above 17,700. On the higher end, 18,000 will likely act as crucial resistance,” Rupak De, Senior Technical Analyst at LKP Securities said.

The weekly Option data indicated that the maximum Call open interest remained at 18,000 strikes, followed by 17,800 and 17,900 strikes which are expected to be crucial resistance levels in coming sessions. The Call writing was at 18,300, then 18,400 strike.

On the Put side, we have seen the maximum open interest at 17,800 strikes, which may be playing a crucial level in coming sessions on the support side, followed by 17,700 and 17,600 strikes, with writing at 17,800 strikes.

Bank Nifty was the star performer on Thursday, helping the benchmark index show a strong recovery in the later part of the day. The banking index rose 575 points or 1.4 percent to 42,133 driven by huge short-covering and formed a long bullish candle on the daily scale making higher-tops higher-bottoms for the third day in a row.

For the week, the Bank Nifty rallied 2.66 percent and formed a strong bullish candlestick pattern on the weekly timeframe. Hence

“With this recent leg of up-move, Bank Nifty has come to an uptrend with an immediate target of about 400-500 points on the upside. Even though Nifty is in a congestion zone up to 18,000, there are several banks that have made the famous Inverted Head and Shoulder pattern and are breaking out from it,” Rahul Ghose, Founder & CEO at Hedged said.

If someone has missed the bus in Bank Nifty, they can re-enter at the 41,780 level or around it for playing the upside, he advised.

India VIX, the fear index fell 2.97 percent to 11.91 levels, from 12.27 levels, but overall, it has been consolidating around 12 levels since last week.

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