Technical View | Nifty forms big bullish candle, all eyes set on record high

Bank Nifty on November 24 opened positive at 42,838 and crossed the much-awaited psychological 43,000 mark to hit a record high of 43,163.40.

Bank Nifty on November 24 opened positive at 42,838 and crossed the much-awaited psychological 43,000 mark to hit a record high of 43,163.40.

The Nifty50 on November 24 put up a stellar performance and ended the last day of the monthly F&O series at a record closing high, with great hope for the December series, especially after FOMC minutes. The increasing possibility for the moderate pace of rate hikes by the US Federal Reserve, and falling oil prices & US dollar index caused a healthy rally.

The index closed way above its opening levels and formed a big bullish candle on the daily charts, indicating further positive mood at Dalal Street going ahead. That apart, there was a breakout of a long downward sloping resistance trend line adjoining October 19, 2021, and November 16, 2022, making higher high higher low formation for the second straight session.

Hence, the sustainability of the 18,400 mark in coming sessions can push the index beyond the 18,600 mark, with crucial support at 18,300 and 18,000 levels, experts said.

“This (record high 18,604) will be the make or break level to be monitored on a closing basis, which will determine further course of action not only from a short term perspective but also for the medium term,” Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan by BNP Paribas said.

The Nifty50 opened higher at 18,326 and after initial minutes of volatility, it gained strength to show a gradual upmove for the rest of the session to reclaim the 18,500 mark intraday. The index finally settled with 217 points gains at 18,484, while the BSE Sensex closed above 62,000 for the first time since October 2021.

“On daily charts, the Nifty has now formed a long bullish candle and is also holding higher high and higher low formation on daily and intraday charts which is broadly positive,” Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities said.

Also read: Taking Stock | Sensex ends at record closing peak, Nifty nears 18,500 on F&O expiry day

For traders, as long as the index holds the support of 18,400, there are chances it could hit 18,600-18,700 levels. On the other hand, below 18,400 the uptrend would be vulnerable, the market expert feels.

As we are at the beginning of the new series, options data is scattered at various far strikes. We have seen maximum Call open interest at 19,000 strike, which can be a crucial resistance in the December series, followed by 18,500 strike, with Call writing at 20,000 strike and then 18,500 strike.

The maximum Put open interest was seen at 18,000 strike which can be crucial support for the Nifty50 in the next series, followed by a 17,000 strike, with Put writing at 18,500 strike and then an 18,300 strike.

India VIX was down by 4.02 percent to 13.48 levels, giving more comfort to bulls and may be helping the index make a good start to the December series.

Bank Nifty opened positive at 42,838 and crossed the much-awaited psychological 43,000 mark to hit a record high of 43,163.40. In fact, It was unstoppable till the last tick of the session and gave the highest-ever closing with gains of 346 points at 43,075.

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The banking index has formed a bullish candle on the daily frame and has been making higher highs – higher lows from the last three straight sessions. “Now the index has to hold above the 43,000 mark to make a march towards 43,500 followed by 43,750 levels, with supports at 42,750 and 42,500 levels,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.

But we have not seen strong participation from broader markets on monthly expiry day as the Nifty Midcap 100 and Smallcap 100 indices gained around half a percent each. Even the market breadth was not strong enough to support broader markets as about 1,149 shares advanced against 827 declining shares on the NSE.

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