Technical View | Nifty forms Doji candle on weekly charts, 17,600 crucial for further upside


The Nifty ended a three-day losing streak to gain 145 points on April 8 after the Reserve Bank of India left key rates unchanged and continued with an “accommodative” stance even as it revised upward the inflation forecast and lowered growth estimates for FY23.

The index opened higher at 17,698 and slipped to the day’s low of 17,600 but defended the level strongly to finally close 145 points higher at 17,784.

It formed a bullish candle on the daily chart as the closing was higher than the opening level but for the week, there was a Doji formation as the closing was near the opening level.

Holding the 17,600-mark is expected to be crucial for further sharp upside towards the recent high of around 18,100, experts said.

“A strong up move witnessed in the last trading session of the week seems to have not only checked the bears but also thrown a lifeline to the bulls,” Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia, said.

Technical trends were sending mixed signals as the daily chart is hinting at a short-term bottom but on the weekly scale, an indecisive Doji had been formed, raising questions mark about the up move which is in progress from the lows of 15,671 over a period of five weeks.

If the Nifty sustains above 17,600, the bulls can retest recent highs of 18,100 but “a close above 18,115 shall result in a fresh breakout, paving the way for a sustainable up move with much bigger targets, Mohammad said.

For the time, positional traders with high risk-taking ability can consider long-side bets but with a stop-loss below 17,600 levels.

India VIX, the fear index cooled further and slipped 6.89 percent to 17.69 levels.

The options data indicates that the Nifty could see a wider trading range of 17,500-18,100 in the coming days.

On the options front, maximum Call open interest was seen at 18,000 strike followed by 19,000 strike, while maximum Put open interest was seen at 17,500 strike followed by 17,000 strike. Call writing was witnessed at 17,800 strike then 17,700 strike, while Put writing was seen at 17,700 strike then 17,600 strike.

Banking index

The Bank Nifty opened positive at 37,620 and remained volatile in a 500-point range. It managed to hold its previous day’s low but could not go past 37,900. The index closed with gains of 195 points at 37,752 and formed a bullish candle on the daily scale.

It formed a high wave Doji on the weekly frame, which indicates a tug of war between the bulls and the bears to make or break 37,777 levels, said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.

The index has to hold above 37,750 for an up move towards 38,000 and 38,250, whereas support can be seen at 37,350 and 37,250, he said.

Positive setup was seen in Cholamandalam Investment, Syngene International, Grasim, SBI Life, ITC, Godrej Consumer Products, JSW Steel, Ambuja Cements, Adani Enterprises, Sun TV Network, M&M Financial, Dr Reddy’s Laboratories, Polycab India, Hindustan Aeronautics, Bharat Forge, SRF, M&M, Ashok Leyland, ICICI Prudential Life, Page Industries, Siemens, Bharat Electronics, Tata Steel, AU Small Finance Bank, Reliance Industries, Tata Consumer Products, Indian Hotels and Cummins India, he said.

Weakness was seen in RBL Bank, Cipla, Maruti Suzuki, Tech Mahindra, PVR, Coforge and L&T Infotech, he added.

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