Nifty50 continued its positive momentum for second consecutive session on Friday and headed towards the 10,250 level. The index continued to make higher highs on the hourly scale, as the session progressed and concluded near the day’s high.
Nifty rallied more than 150 points and formed a strong bullish candle on the daily scale. The market breadth remained strongly in favour of the advancing counters, which is a positive sign for the index. Nifty has been moving in a rising channel on the daily scale by connecting swing lows of 7,511, 9,004 and 9,544 and 9,845 levels, and recently turned from its support zone, holding the 50 DEMA.
Follow-up buying emerged post a breakout of the triangle pattern on the intraday scale, which indicated continuation of the momentum. The RSI has turned northward and saw a positive crossover with its average, which has bullish implications.
Now, the index has to continue to hold above 10,180 level to extend its move towards 10,333 and then 10,500 levels, while support has shifted higher to 10,040 and 10,000 levels.
In monthly options, maximum Put open interest was at 9,000 followed by 9,500 levels, while maximum Call OI was at 10,500 followed by 11,000. There was Call writing at 11,000 and 10,600 levels, while meaningful Put writing was seen at 10,000 and 10,100 levels. The options data suggested a wider trading range between 9,900 and 10,500 levels.
India VIX moved 4.75 per cent lower to 30 level. The volatility index continued to decline for the second session, providing comfort and support to the market.
Bank Nifty continued its positive momentum and headed towards the 21,500 mark. It has been making higher lows since last three sessions and has formed a bullish candle on the daily and weekly scales. Eventually, the index concluded the week with 3.31 per cent gains and see the highest weekly close in seven weeks. Bank Nifty has surpassed the falling supply trend line on the daily scale and is also making a round formation. At its current juncture, the index has the potential to move towards the 21,800 – 22,000 zone till it holds above the 20,800-21,000 zone. Looking at the current chart structure, traders are advised to trade with a positive bias and use any small decline as a buying opportunity.
Nifty futures closed positive at 10,246 with 1.74 per cent gains. The momentum was positive in some stocks like RIL, Chola Finance, Bajaj Finance, L&T Finance, M&M Finance, Axis Bank, ICICI Bank while selling pressure emerged in IndusInd Bank, IGL and Nestle.
(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)
if(geolocation&&geolocation!=5&&(typeof skip=='undefined'||typeof skip.fbevents=='undefined')) !function(f,b,e,v,n,t,s) if(f.fbq)return;n=f.fbq=function()n.callMethod?n.callMethod.apply(n,arguments):n.queue.push(arguments);if(!f._fbq)f._fbq=n;n.push=n;n.loaded=!0;n.version='2.0';n.queue=;t=b.createElement(e);t.async=!0;t.src=v;s=b.getElementsByTagName(e);s.parentNode.insertBefore(t,s)(window,document,'script','https://connect.facebook.net/en_US/fbevents.js');fbq('init','338698809636220');fbq('track','PageView');