The Nifty on August 24 managed to close in the green amid consolidation and volatility ahead of the expiry of August derivative contracts.
The index ended up 27.50 points, or 0.16 percent, higher at 17,605 and formed a bullish candlestick on the daily charts, continuing recovery from the recent low for the second consecutive session.
“If the index manages to sustain above 17,499 levels (the day’s low) in the next session then bulls can eventually make an attempt to bridge the bearish gap present in the zone of 17,690 and 17,710 levels,” Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia said.
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If the index fails to sustain above 17,499 then it can head towards its 20-day simple moving average whose value is placed around 17,430. Going forward, consolidation can be expected between 17,710 and 17,400 levels.
For the time, traders should wait for more strength before creating long- side bets. Intraday shorting can be considered below 17,490 for a modest target of 17410, the market expert advised.
Banking & financial services, metal, and select FMCG stocks supported the market. The Nifty midcap 100 and smallcap 100 indices also gained, rising 0.7 percent and 0.8 percent.
A drop volatility also supported the market. India VIX, which measures the expected volatility in the market, was down by 3.25 percent to 18.43 levels.
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The options data indicated that in the immediate term, the Nifty50 may see a trading range of 17,350 to 17,800 levels. The maximum Call open interest was seen at 18,000 strike followed by 18,500 strike while maximum Put open interest was seen at 17,000 strike then 17,500 strike.
The maximum Call writing was seen at 17,700 strike followed by 17,800 strike while Put writing was seen at 17,600 strike then 17,500 strike.
Banking index
The Bank Nifty also opened negative at 38,553 but witnessed a pullback move and after respecting 38,550 levels, it moved above 39,100 intraday. Finally, it closed above the 39,000 mark with gains of 341 points.
The banking index formed a bullish candle on the daily scale. Now it has to hold above 38,888 for an up move towards 39,250 and 39,500, whereas supports are seen at 38,750 and 38,500, Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
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