The Nifty gained 2.6 percent on May 17 to close at 16,259.30 on sustained buying, especially in metal, auto and banking names.
Amid mixed global cues, the Nifty opened higher at 15,912.60, and extended gains as the day progressed. It comfortably closed above 16,200, forming a strong bullish candle on the daily frame.
Now it has to hold above 16,161 zones for an up move towards 16,500 and 16,666 zones, whereas supports shift higher to 16,161 and 16,061 zones, experts said.
“The near term trend shall remain positively biased as long as the index sustains above 15,900 levels,” Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in, said.
A close below 15,900 would see the positive momentum dissipate and may induce more weakness in the market. While dips may look like a buying opportunity, technical stop loss levels will remain below 15,900, he said.
The options data suggests a shift in the trading range between 15,900 and 16,600.
On the options front, Maximum Call OI (Open Interest) is at 17,000 then 16,500 strike, while Maximum Put OI is at 16,000 strike.
Call writing is seen at 16,900 then 16,600 strike, while Put writing is seen at 16,000 then 16,100 strike.
“Volatility cooled from its higher zones which accelerated the bulls and it needs to further come down to 17-18 zones for complete market stability,” said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
India VIX was down by 7.29 percent from 24.52 to 22.74 levels.
Banking index
The Bank Nifty opened positive and moved in a unilateral manner throughout the session in line with the broader market.
It touched an intraday high of 34,366 and closed with gains of around 700 points.
It formed a strong Bullish candle and negated its lower lows formation on the daily frame.
“Now it has to hold above 34,250 zones for an up move towards 34,500 and 34,750 zones, whereas supports can be seen at 34,000 and 33,666 zones,” Taparia said.
Among stock, positive setup was seen in Hindalco, Tata Steel, Coal India, Coromandel, Tata Power, ONGC, Tata Chemicals, HAL, Jindal Steel, M&M Financial, Tata Motors, Bata India, ICICI Bank, Reliance, ITC and Maruti Suzuki. Weakness was seen in Aurobindo Pharma and Lal Path Labs.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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