Technical View: Nifty forms bullish candle, experts say high-risk traders can create long positions
The Nifty50 had yet another strong session registering 2 percent gains on March 30, backed by positive global sentiment after the news that US President Joe Biden is likely to announce $ 3-trillion infrastructure package. The BSE Sensex went past the 50,000-mark as all sectors participated in the bull run.
After opening higher at 14,628.50, the Nifty50 remained strong throughout the session and hit the day’s high of 14,876.30 before signing off at 14,845.10, up 337.80 points or 2.33 percent.
The index, after a Doji formation on March 26, formed a healthy bullish candle on the daily charts on March 30 as the closing was higher than opening levels. Experts expect the bullishness to continue if the index rises and sustains above 15,000.
Traders should focus on stock-specific opportunities, Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia said. Those with a high-risk appetite can consider long positions if the index sustains above 14,900 for more than 30 minutes for a modest target of 15,000 with a stop below intraday low, he said.
“Albeit strong upmove on Nifty50 seems to have kicked in a fresh leg of upswing from the recent lows of 14,264, as the index almost retraced last leg of losses from the highs of 14,878 to 14,264 in just two trading sessions, the larger trend still appears to be sideways,” Mohammad said.
In the next trading session, if the index sustains above its interim top of 14,878, then the upswing will ideally extend towards its logical target of 15,100. Unless the index registers a sustainable close above 15,336, new sustainable life highs should not be expected, he said.
On the downside, bulls need to defend the day’s bullish gap zone present between 14,617 and 14,572 and if the Nifty closes below 14,570, then the current bullish optimism will fade away, he said.
India VIX fell by 0.80 percent from 22.65 to 20.48 levels.
On the options front, maximum Put open interest was seen at 14,000 followed by 14,500 strike, while maximum Call open interest was at 15,000 followed by 16,000 strike. Call writing was seen at 14,800 then 15,200 strike while Put writing was seen at 14,000 then 14,500 strike. Options data indicated that the Nifty could see an immediate trading range of 14,500 to 15,000/15,200 levels.
The Bank Nifty opened gap up at 33,615.90 but moved in a range for the most part of the day. The banking index concluded the day with the gains of 556.90 points or 1.67 percent at 33,875.10 but has been underperforming the broader market from the past two sessions.
The index formed a bullish candle on the daily scale and has been forming higher highs-higher lows for the past two sessions. “The Bank Nifty has to hold above 33,500, to witness an upmove towards 34,000 and 34,500 levels, while on the downside, support is seen at 33,333 and 33,000 levels,” Chandan Taparia, Vice President | Retail-Research at Motilal Oswal Financial Services, said.
On the stock front, a bullish setup was seen in UPL, Mindtree, Adani Enterprises, JSW Steel, Tata Steel, HCL Technologies, Infosys, Biocon, Nestle India, HUL, Shree Cement, Divis Labs, Cummins India, HDFC Bank, TCS and Titan Company. Weakness was seen in M&M Financial, PFC, REC, InterGlobe Aviation, RBL Bank, M&M and Bata India, he added.