The Nifty50 on January 17 recovered all its previous day’s losses and added more gains as the day progressed to close above the psychological 18,000 mark for the first time in the last six straight sessions.
The index has formed a long bullish candle on the daily charts making higher high higher low formation for the third consecutive session indicating the possibility of further uptrend in coming sessions. Hence, if the index extends its uptrend and decisively closes above 50 DEMA (day exponential moving average – 18,097) then there could be a possible move towards 18,200-18,300 levels, with crucial support at 17,900-17,800, experts said.
The rally was driven by FMCG, technology, oil and gas, select banking and financial services and auto stocks.
The Nifty50 opened higher at 17,923 and climbed up to 18,072, an intraday high. Finally, it settled with 159 points gains at 18,053.
“Technically, the market has formed a bullish candle on daily charts and higher bottom formation on intraday charts, which is indicating further uptrend from the current levels,” Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities said.
For the trend-following traders, he feels 17,950 would act as a strong support zone, above which the index could move up to 18,100-18,200 levels.
On the other hand, below 17,950, the uptrend would be vulnerable and the index could slip to 17,900-17,850, the market expert said.
India VIX was down by 2.87 percent from 15.02 to 14.59 levels, making the trend more favourable for bulls. If the VIX falls below 14 and sustains below the same, then there could be more stability in the market, experts said.
On the weekly Option front, maximum Call open interest was seen at 18,200 strike, which is expected to be key resistance in coming sessions, followed by 18,000 strike, with Call writing at 18,200 strike then 18,250 strike.
The maximum Put open interest was seen at 17,900 strike, followed by 17,800 strike, which are going to be crucial support areas for the market, with meaningful Put writing at 18,000 strike and then 17,900 strike.
The above Option data indicated that 17,850-18,200 levels could be an expected trading range for the Nifty50 for coming sessions.
The Bank Nifty opened higher at 42,241 but witnessed some muted movement for the most part of the day and underperformed the broader markets. It saw a recovery in the second half of the session and closed with gains of 68 points at 42,235.
The banking index has formed a Long Legged Doji sort of candle on the daily scale as good recovery was seen from lower levels. “It has to hold above the 42,000 mark to make an up move towards 42,500 and 42,750 levels, whereas supports are placed at 42,000 then 41,750,” Chandan Taparia, Vice President, Analyst-Derivatives at Motilal Oswal Financial Services said.
But the broader markets had a lacklustre day as the Nifty Midcap 100 and Smallcap 100 indices ended flat with a negative bias.
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