Nifty maintains uptrendThe upside momentum continued in the Nifty 50 for another session as the index recorded a fresh all-time closing high after consolidating at higher levels on July 15.
The Nifty 50 opened higher at 24,588 and maintained levels above 24,500 throughout the session.
However, having formed this pattern amidst range-bound movement, the expectation of significant downward movement could be diminished, as per Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
Weekly options data also suggests that the Nifty 50 is likely to approach the psychological 25,000 mark, with immediate support at 24,500.
Bank NiftyThe Bank Nifty outperformed the benchmark Nifty 50, rising 177 points to 52,456 and forming a bullish candlestick pattern with minor upper and lower shadows on the daily charts.
Nifty maintains uptrend
The upside momentum continued in the Nifty 50 for another session as the index recorded a fresh all-time closing high after consolidating at higher levels on July 15. As long as the index sustains above its immediate support of 24,400, further movement towards the 24,900-25,000 area is likely in the coming sessions, while crucial support is at 24,200, according to experts.
The Nifty 50 opened higher at 24,588 and maintained levels above 24,500 throughout the session. The index reached an intraday record high of 24,635 and closed at 24,587, up 86 points, forming a Doji candlestick pattern on the daily charts, indicating indecision among bulls and bears about the future market trend.
Story continues below Advertisement Remove Ad
Normally, such Doji formations after a reasonable uptrend and at significant resistance levels are considered impending reversal signals from highs after confirmation. However, having formed this pattern amidst range-bound movement, the expectation of significant downward movement could be diminished, as per Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
Overall, he believes the near-term trend of the Nifty remains positive. "Having sustained above the hurdle of 24,400 levels (1.618 percent Fibonacci extension), there is a higher possibility of further gradual upward movement in the Nifty towards 24,950 levels in the next week. Immediate support is at 24,450," he stated.
Weekly options data also suggests that the Nifty 50 is likely to approach the psychological 25,000 mark, with immediate support at 24,500.
On the Call side, maximum open interest was observed at the 25,000 strike, followed by the 24,900 and 25,500 strikes, with the most writing at the 25,000 strike, followed by the 24,900 and 24,600 strikes. On the Put side, the 24,500 strike holds the maximum open interest, followed by the 24,000 and 24,400 strikes, with writing at the 24,600 strike, and then the 24,500 and 24,100 strikes.
Bank Nifty
The Bank Nifty outperformed the benchmark Nifty 50, rising 177 points to 52,456 and forming a bullish candlestick pattern with minor upper and lower shadows on the daily charts. It was indeed a strong start for the week.
Story continues below Advertisement Remove Ad
According to Rupak De, Senior Technical Analyst at LKP Securities, the Bank Nifty appears poised for a breakout from recent consolidation. The index has been holding above the critical moving average (20-day EMA around 52,000).
He anticipates the index might advance towards 53,000 once it sustains above 52,500. Significant Put writing is evident at 52,500, which could bolster Bank Nifty bulls. Conversely, failure to surpass 52,500 in the initial hours might attract selling pressure, Rupak cautioned.
Meanwhile, volatility rebounded after declining in the previous couple of trading sessions but remains within last Thursday's range. India VIX rose 3.37 percent to 14.19 from 13.73 levels, which is not currently a concern.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
