Technical View: Another record high sees Nifty form bullish candle, next target seen at 15,850


The Nifty50 started off higher after two days of consolidation to trade in the green throughout the session and closed at a record high on June 3, a day ahead of the RBI’s monetary policy.

After opening higher at 15,655.55, the Nifty hit an intraday high of 15,705.10 and low of 15,611. The index finally settled 114.20 points higher at 15,690.40.

The momentum can take the Nifty towards 15,850 in the coming sessions, experts said.

Banking & financials, realty, select metals and FMCG stocks lent support. The index formed a bullish candle on the daily charts as the closing was higher than the opening levels.

As the twin momentum oscillators are still in sell mode, traders should remain neutral on the long side, Mazhar Mohammad, Chief Strategist–Technical Research & Trading Advisory at told Moneycontrol. Intraday traders can attempt to short below 15,590 for a target of 15,490, he said.

The volatility declined sharply, supporting the market today. India VIX fell by 8.51 percent from 17.21 to 15.74 levels, the lowest in since February 2020.

“Albeit Nifty50 registered a gap up opening, intraday trading range remained narrower with 94 points, which resulted in a small bullish candle but with relatively longer shadow, giving it the shape of an indecisive formation,” Mohammad said.

For the next session, it is critical that the index sustains above the minor bullish gap zone of 15,611–11,597. In that scenario, as momentum is strongly biased in favour of bulls, a higher target toward 15,850 can’t be ruled out, he said.

If the index fails to sustain above 15,597 on a closing basis, it will be an initial sign of weakness and can drag the index to 15,459, Mohammad added.

The options data indicated that the Nifty50 could see an immediate trading range of 15,500-15,850. The lower trading range has been shifted higher to 15,500 from 15,300 levels.

On the options front, maximum Put open interest was seen at 15,000 followed by 14,500 strike, while maximum Call open interest was seen at 16,000 followed by 15,500 strike. Minor Call writing was seen at 15,900 then 16,200 strike, while Put writing was seen at 15,200 then 15,300 strike.

The Bank Nifty opened gap up at 35,536.45 and continued its bullish stance towards 35,750. It formed a bullish candle on daily scale and closed the session 275.20 points higher at 35,649.

“It has to hold above 35,500 to witness an upmove towards 36,000 and 36,250 levels, while on the downside, support is seen at 35,250 and 35,000 levels,” said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.

On the stock front, bullish setup was seen in Voltas, Titan, Muthoot Finance, ONGC, Escorts, Apollo Hospitals, Jubilant Foodworks, LIC Housing Finance, Eicher Motors, L&T, Adani Enterprises, Siemens, Havells, Container Corporation, Axis Bank, SBI and Bajaj Finance, he said. Weakness was seen in IndusInd Bank, Biocon, HCL Technologies and M&M.