The Nifty zoomed more than 2 percent on October 4, tracking a rally in global shares amid hope that the US Federal Reserve may slow down with liquidity tightening and upbeat quarterly updates by banks at home.
The index closed 387 points higher at 17,274 as every sector participated in the rally, with banking & financial services, information technology and metal stocks gaining the most.
The index closed near the day’s high, which was in the middle of the bearish gap zone (17,292-17,196) created on September 26 and formed a bullish candlestick on the daily charts, making higher highs.
“Going ahead, 17,300 is the immediate barrier to watch out for. Unless that is crossed on a closing basis, the index is likely to witness short-term consolidation,” Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas said.
If the index goes past 17,300 on a closing basis, it can rise to 17,500. The near-term support shifted higher to 17,000, the market expert said.
If the index decisively closes above 17,600 (near the high of September 26 when the market fell 1.7 percent), it may march towards 18,100, with crucial support at 17,000, experts said.
The broader markets also joined the rally. The Nifty midcap 100 and smallcap 100 rose 2.66 percent and 1.76 percent.
Also read: Fireworks on Dussehra eve, Sensex zooms 1,276 points and Nifty above 17,250
The market will remain shut on October 5 for Dussehra.
There was a sharp drop in volatility. The India VIX, an indicator of volatility expected over the next 30 days, declined 8.4 percent to 19.57.
On the options front, the maximum Call open interest was at 18,000 strike followed by 17,500 strike, while the maximum Put open interest was at 16,500 strike then 16,000 strike.
Also read: Sensex, Nifty have fallen over 6% since last Dussehra, first time in 12 years
Marginal Call writing was seen at 17,200 strike then 17,300 strike, while marginal Put writing was seen at 17,200 strike with minor unwinding at immediate strikes.
Considering the data, the Nifty can trade in the range of 17,000-17,500 in the immediate term.
The banking index
The Bank Nifty opened 670 points higher at 38,700 and closed near the day’s high at 39,110, up 1,080 points.
“Now the banking index has to hold above 38,888 levels to make an up move towards 39,500 and 40,000 levels, whereas supports are placed at 38,500 and 38,250 levels,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
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