The Nifty50, as expected, witnessed a gap-up opening on November 11 and finally closed near a 13-month high. The index rallied more than 300 points, tracking a sharp uptrend in global counterparts after the US reported a softer-than-expected inflation print for October at 7.7 percent. This hinted at the possibility of less hawkish rate hike by the US Federal Reserve in upcoming policy meetings.
The index, which has formed a bullish candle on the daily charts, finally hit the 2022 high (18,350). Hence, if the index sustains above this level, then that may raise the possibility of Nifty inching towards a record high (18,604) in coming sessions, with the crucial support of the 18,000 mark, experts said.
The Nifty50 opened gap up by around 250 points at 18,272 and hit a day’s high of 18,362.30. It rallied 321 points or 1.78 percent to close at 18,349.70.
“On the daily chart, the index has moved above the previous consolidation. The trend looks positive as long as the 18,300 level is held on a closing basis,” Rupak De, Senior Technical Analyst at LKP Securities said.
On the higher end, it may move towards 18,600 over the near term. On the lower end, support is pegged at 18,200-18,000, he added.
On the monthly expiry ending November 24, we have seen maximum Call open interest at 19,500 strike followed by 19,000 strike, with Call writing at 18,400 strike then 18,300 strike.
Also read: Taking Stock | Nifty crosses 52-week high; Sensex gains 1,181 points; rupee up 100 paise
The maximum Put open interest was seen at 18,000 strike followed by 17,000 strike and 18,300 strike, with Put writing at 18,300 strike then 18,400 strike. The Option data indicated that the Nifty50 may trade in the range of 18,000-18,500 in the near term.
Indicators such as RSI (relative strength index) and MACD (moving average convergence and divergence) also indicate a positive direction.
Hence, “overall, the trend is positive, and we recommend buying on dips until key supports are breached,” Om Mehra, Technical Associate at Choice Broking said, adding on the daily chart Bank Nifty is quite strong till it manages to sustain above 42,000.
Bank Nifty also had a strong gap-up opening of 560 points at 42,163 and made a new record high of 42,345. The banking index rose 533 points to settle at 42,137, but formed a high wave or Doji kind of pattern on the daily charts, indicating indecisiveness among bulls and bears about the future market trends.
On the derivatives front, we have seen the highest Call open interest at 43,000 strike followed by 42,500 strike price while on the Put side, the highest open interest remained at 41,500 strike followed by 41,000 strike.
Also read: Merged HDFC entity could have double the weight in MSCI, says Macquarie
The volatility index India VIX fell sharply by 7.46 percent to 14.41 levels, giving more comfort to bulls. If the volatility sustains below the 15 mark then there could be more stability in the market, experts said.
But the broader markets had a disappointing day compared to benchmarks as the breadth was not strongly in favour of bulls. The Nifty Midcap 100 and Smallcap 100 indices gained 0.07 percent and 0.38 percent, respectively. About 1,083 shares advanced against 888 declining shares on the NSE.
Disclaimer: The views and investment tips expressed by investment 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.
