For Nifty, 17,500 and 17,400 would act as key support zones
The Nifty50 on October 21 started off on a positive note but weakness in European counterparts weighed on the sentiment in the later part of the session. The index eventually settled flat with a positive bias amid caution ahead of the long weekend, thereby extending the uptrend for the sixth consecutive session.
Banks helped the market close in the green.
The index formed a small-bodied bearish candle on the daily charts as the closing was lower than the opening levels. The Nifty50 seems to have taken good support at 17,500-17,400 levels now, hence if it holds the 17,500 mark in coming sessions then the index can easily march towards 17,700-17,900 levels, experts said.
On a weekly basis, the Nifty50 has seen the formation of a decent bullish candlestick pattern, indicating that 17,900 is going to be the next stop for the index. It recouped all its previous week’s losses and closed with 2.27 percent gains during the week.
On the broader markets front, however, there was underperformance compared to benchmarks. The Nifty Midcap 100 index was down 0.7 percent and Smallcap 100 index fell 0.14 percent amid weak breadth. About two shares declined for every share rising on the NSE.
The Nifty50 opened higher at 17,623 and hit an intraday high of 17,670, but some profit booking in the later part of the session pulled down the index up to 17,521 intraday. The index finally closed at 17,576, up 12.3 points.
“The Nifty successfully surpassed the 20 and 50 days SMA (simple moving average) resistance mark which is largely positive. It has also formed a long bullish candle on weekly charts that suggest further uptrend from the current levels,” Amol Athawale, Deputy Vice President – Technical Research at Kotak Securities said.
Also read – Nifty to end the year above 18,000 despite volatility: Market Sentiment Survey
For Nifty, 17,500 and 17,400 would act as key support zones. Above this, the index could move up to 17,800-17,950.
On the flip side, if the index closes below 17,500 or 50 days SMA mark, it could slip to 17,400-17,350, the market expert said.
The volatility index India VIX was up by 0.27 percent to 17.28 levels but remained below the 18 mark. If the volatility sustains below these levels, then the trend may remain in favour of bulls, experts said.
On the Option front, we have seen maximum Call open interest at 18,000 strike followed by 18,200 strike & 17,600 strike, with Call writing at 18,200 strike then 17,700-17,600 strikes. The maximum Put open interest was seen at 17,000 strike followed by 17,500 strike, with Put writing at 17,600 strike then 16,700 & 17,500 strikes.
The above Option data indicated that the Nifty50 may trade in the range of 17,400-17,700 levels in coming sessions.
Bank Nifty opened 270 points higher at 40,371 and extended gains up to 41,032 intraday. The banking index rallied 685 points to close at 40,784 and formed a bullish candle on the daily charts.
Even on the weekly scale, there was a big bullish candle formation, indicating the uptrend may continue in coming sessions with 41,677 to be next level to watch. It gained 3.8 percent during the week.
“Now it has to hold above 40,500 level to make an up move towards 41,250 and 41,500 levels, whereas supports are placed at 40,500 and 40,250 levels,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
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