The Nifty snapped a three-day losing streak to end above 16,150 on May 26 on buying across sectors, barring FMCG.
The index closed near the day’s high at 16,170.20, up 144.40 points, or 0.90 percent. It formed a bullish hammer candle on the daily scale with a long lower shadow, indicating buying on declines.
It has to hold above 16,061 for an up move towards 16,400 and 16,500, whereas supports are placed at 16,061 and 16,000, experts said.
“As we are presuming a consolidation range for the Nifty between 15,900 and 16,400 levels, post this smart intraday recovery, ideally the Nifty should head towards the upper end of the trading range present around 16,400 levels,” Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in, said.
A close below 16,000 may, however, weaken the index with the initial target of 15,700, he said.
The options data suggests a trading range between 15,800 and 16,500.
Since it’s the beginning of a new series, the options data is scattered at various far strikes. Maximum Call OI (Open Interest) is at 17,000 then 17,500 strike, while maximum Put OI is at 15,500 then 16,000 strike.
Call writing is seen at 16,500 then 17,000 strike, while Put writing is seen at 16,000 strike.
“Volatility cooled down and is giving some respite to the bulls but it needs to come down to 18 zones for market stability,” said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
India VIX was down by 10.14 percent from 25.28 to 22.72 levels.
Banking index
The Bank Nifty opened positive and remained resilient in the first half despite weakness in the broader market. It skyrocketed in the second part of the day to inched towards 35,200.
It made a bullish candle on the daily frame with a long lower shadow to close with gains of 755 points at 35,095.
“Now it has to continue to hold above 34,750 zones for an up move towards 35,500 and 35,750 zones, while on the downside, support exists at 34,750 and 34,500 zones,” Taparia said.
Among stocks, a positive setup was seen in the Torrent Pharma, Max Financial Services, SBIN, Colgate Palmolive, HDFC Bank, Axis Bank, Concor, ICICI Bank, HDFC, NTPC, Marico, Balkrishna Industries, Bajaj Auto, HAL and ICICI Prudential. Weakness was seen in the Havells, IEX, Divis Labs, UPL, Ipca Labs, PolyCab, L&T Technology Services and Cipla.
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