The gaining momentum continued for the eighth straight session on Dalal Street, thus aiding the Nifty50 index to close above the 18,800 mark for the first time on December 1 (the weekly expiry day) amid positive global cues. The US Fed’s hints at smaller rate hikes going ahead and encouraging economic data points bolstered investor sentiment.
The index formed a bearish candle on the daily charts as the closing was lower than the opening levels, but the higher highs continued for the seventh day in a row and even the momentum oscillator RSI (relative strength index) and momentum indicator MACD (moving average convergence and divergence) retained upward journey on the daily as well as weekly frames.
Hence, the consistency in momentum may indicate that the Nifty50 is likely to inch towards the 19,000 mark first before any kind of major consolidation and correction, with supports at 18,600 and 18,500 levels, experts said.
The Nifty50 opened with more than 100 points gains at 18,872 and hit an intraday all-time high of 18,888. The index did see some profit booking due to temporary overbought positions but maintained a positive trend and finally settled at a record closing high of 18,812.50, up 54 points.
“Expansion in the hourly & the daily upper Bollinger bands is supporting the price action on the way up. The overall structure shows that the index can continue with the uptrend & head towards the short-term target of 19,000,” said Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan by BNP Paribas.
On the other hand, the zone of 18,700-18,600 will act as a support as per the principle of role reversal, Ratnaparkhi said.
The Option data also indicated that 19,000, which has a maximum open interest, can be the crucial resistance for the Nifty50, whereas the support is placed at the 18,500 strike, which is expected to be the range for the index in coming sessions.
We have seen maximum Call open interest at 19,000 strike, followed by 20,000 strike & 19,500 strike, with Call writing at 19,400 strike, then 19,800 strike & 18,900 strike. On the Put side, there was maximum open interest at 18,500 strike, followed by 18,000 strike, with writing at 18,500 strike, then 18,300 strike.
The volatility index India VIX fell by 3.24 percent to 13.36 levels, giving more comfort to the bulls, maybe after the rising signs of a slow rate hike by the Fed going ahead.
Bank Nifty opened above 43,500, the crucial resistance area, with nearly 300 points gains and hit a record high of 43,515. Overall, the index remained in a range of 300 points for a major part of the session on the higher side and finally settled with just 30 points gains at 43,261.
The banking index has formed a bearish candle which somewhat resembles a Bearish Belt Hold kind of pattern on the daily charts, but continued higher highs for the third straight session.
“The index to resume the up move must surpass the level of 43,500 on the upside on a closing basis. The undertone remains bullish and one should keep a buy-on-dip approach with strong support at the 43,000-42,800 zone,” Kunal Shah, Senior Technical Analyst at LKP Securities said.
The broader markets maintained an upward journey for yet another session as the Nifty Midcap 100 index gained 0.77 percent and Smallcap 100 index rose 0.4 percent.
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