Technical View: Nifty forms bullish candle, needs to go past 14,880 to break out of range
The Nifty that was off to a muted start gained momentum and ended nearly a percent higher on April 7 after the Reserve Bank of India (RBI) kept the key policy rates unchanged while reiterating an “accommodative stance”.
The index formed a bullish candle along with a long shadow on the daily scale and continued forming higher lows of the last two sessions.
The Nifty has to cross and hold above 14,880 to witness a range breakout and an up move towards 15,000, experts said.
For the time, traders should shift focus on stock-specific opportunities as directional trade on the index would emerge only on a close above 14,900, Mazhar Mohammad of Chartviewindia said.
India VIX fell 2.84 percent from 20.84 to 20.24 levels. Options data suggests a wider trading range between 14,500 and 15,100.
On the options front, Maximum Put OI is at 14,000 followed by 14,500 strike, while maximum Call OI is at 15,000 followed by 16,000 strike. Minor Call unwinding is seen at 14,800 then 15,000 strike, while Put writing is seen at 14,500 and 13,500 strike.
The Bank Nifty opened flattish but witnessed buying interest after hitting an intraday low of 32,141 zones. “Some range-bound move towards the end of the day was witnessed and it settled with gains of around 500 points,” said Chandan Taparia, Vice President, Retail-Research at Motilal Oswal Financial Services.
It formed a Bullish Engulfing pattern on the daily scale and negated its lower highs formation of the last two sessions. It needs to decisively cross and hold above 33,000 for an up move towards 33,500 and 34,000, while on the downside, support exists at 32,500 and 32,000 zones, he said.
On the stocks front, a bullish setup was seen in Cholamandalam Financial, JSW Steel, Apollo Hospital, Mindtree, Voltas, Wipro, Britannia, Aarti Industries, Vedanta and Godrej Consumer Products. Weakness was seen in Amara Raja Batteries, Colgate Palmolive, NTPC and TVS Motor.