Technical View: Nifty forms bullish candle; 11,250-11,300 crucial for bulls
After moving in a narrow range for the most part of the day, Nifty snapped its 9-day losing streak in the second half of the session to break above 11,200 making a bullish candle on the daily charts.
Nifty opened at 11,151 and touched an intraday low of 11,108 before bulls took charge of D-Street. The index surged to an intraday high of 11,294 before closing the day at 11,222, up 73 points.
The index staged a bounceback from 11,100 to reclaim 11200 but found resistance around its 5-day exponential moving average (EMA). The index needs to reclaim 11,250-11,300 on closing basis for bulls to take charge else the selling pressure could continue, suggest experts.
“Nifty remained volatile for the day as it moved in a broad range of 186 points before signing off the session with a bullish candle. Interestingly, this bounce occurred after retracing around 62 percent of the entire rally from the lows of 10,585,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“Hence, going forward if the index manages to defend May 14 low of 11,108 then some pullback rally ahead of a big event can be expected and a close above 11,300 can act as a confirmation of short-term strength in this regard, which can eventually expand the upmove towards 11,479,” he said.
Mohammad further added that contrary to this if 11,100 is breached then downswing can get extended further towards 200-day moving average whose value is placed around 11,020.
India VIX fell down 0.90 percent at 27.13. However, higher VIX suggests that volatile swings could continue in the market ahead of the election outcome.
In the options market, maximum Put OI was placed at 11,000 followed by 11,500 while maximum Call OI was placed at 12,000 followed by 12,500.
Call writing was seen at 12,000 followed by 11,800 while Put writing was seen at 11,200. Options band signifies a shift in a lower trading range to 11,200-11,700.
“Nifty has finally closed in the green with the formation of bullish candle after the weakness of nine consecutive trading session, but closed below its immediate hurdle of 11,250,” Chandan Taparia, derivative & technical analyst at Motilal Oswal Securities told Moneycontrol.
“It has to negate the formation of lower highs, lower lows by holding above 11,250 to witness an up move towards 11,333 then 11,350 while on the downside, support is at 11,180 then 11,020,” he said.