The Nifty50 further extended its upward journey on December 14 and moved closer to 18,700-18,750 levels, which can remain as an initial resistance followed by record high (18,888). The rally in Asian counterparts following positive cues from US overnight also aided sentiment.
The index has remained positive throughout the session and formed Doji kind of pattern on the daily charts, indicating indecisiveness among bulls and bears about future market trend, but made higher highs higher lows for second straight day. Traders await interest rate decision by US Federal Reserve tonight.
The index is likely to face initial hurdle at 18,700 and crossing the same decisively can take it towards 18,900 levels, with initial support at 18,600 followed by 18,500 levels, experts said.
The Nifty50 opened higher at 18,671, and hit an intraday high of 18,696. The index lost some gains during the day but maintained positive terrain till the end, and finally closed the session with 52 points gains at 18,660.
“Nifty remained rangebound following a start with an upside gap. On the higher end, however, it failed to move beyond the resistance of 18,700. The trend remains positive as long as it holds above 18,500,” said Rupak De, Senior Technical Analyst at LKP Securities.
On the higher end, the directional up move may come above 18,700 only, he feels. Till then, Nifty may remain within the range of 18,500-18,700, the expert said.
The option data also indicated that 18,700 is expected to crucial level to watch, while in near term, the range for the index may be 18,700-18,800 levels.
On the Option front, we have consistently seen maximum Call open interest at 19,000 strike followed by 20,000 strike and 18,700 strike, with Call writing at 19,200 strike then 19,100 and 18,700 strikes.
The maximum Put open interest was seen at 18,000 strike, followed by 18,500 strike, with Put writing at 18,700 strike, then 18,400 and 18,800 strikes.
Meanwhile, traders should maintain their focus on identifying stocks from the sectors which are trading upbeat. Apart from the index majors, one can selectively choose from the broader indices too, citing the recent improvement in their participation, Ajit Mishra, VP – Technical Research at Religare Broking advised.
The Nifty Midcap 100 and Smallcap 100 indices remained in an uptrend, rising 0.6 percent and 0.7 percent respectively, while the volatility index India VIX closed largely flat at 12.89 levels.
Bank Nifty also rallied further and closed above 44,000 for the first time in history. The index rose 102 points to 44,049 and formed Doji kind of pattern on the daily charts, but making higher highs higher lows for yet another session.
“The 44,000 strike has seen the highest open interest built up on the Call side. The index in order to continue the momentum on the upside must sustain above 44,000 level, to continue the rally towards 45,000 on the upside,” Kunal Shah, Senior Technical Analyst at LKP Securities said.
After the spectacular rally in PSU banks, now it’s time for the private banks to fire up and carry the momentum higher, he feels.
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