The index formed bullish candle on the daily candlestick charts as well as weekly scale. It closed half a percent higher for the week.
The Nifty 50 after opening sharply higher above psychological 11,400-mark extended rally to move near its intraday record high and finally ended at record closing high on Friday, driven by broad based buying.
The index formed bullish candle on the daily candlestick charts as well as weekly scale. It closed half a percent higher for the truncated week.
The broader markets also participated in the rally today with the Nifty Midcap index rising over a percent while all sectoral indices ended in the green with Nifty Bank, FMCG, Metal and Pharma rising 1-2 percent.
The Nifty 50 started off session above 11,400 levels at 11,437.15 and rallied further during the day to touch an intraday high of 11,486.45 but failed to reclaim its intraday record high of 11,495.20 seen on August 9. The index ended at record closing high of 11,470.75, up 85.70 points.
Even on weekly charts a decent bull candle can be seen for fourth week in a row as intra week dip towards 11,340 was bought into by the market participants considering it as an opportunity, he said. "Post Friday's recovery trading set up is once again favouring bulls."
Hence, he said sustaining above 11,430 levels Nifty 50 should once again create history with new highs by clearing the recent top of 11,495 levels. In such a scenario next resistance, on medium term charts for Nifty 50 is placed around 11,630 levels.
On the downsides it looks critical to sustain above 11,400 levels below which bears can once again dominate in short term, according to him.
Volatility in the market has again started coming down from the proximity of 14 percent. Today the India Volatility Index fell by 3.48 percent to 13.17.
In the last few months, whenever volatility has come down from 14 percent the Nifty has traded positive for a few weeks. Hence, the coming week is likely to see limited downsides, which should limit till 11,400. The move should extend towards 11,600 on higher side.
The highest Put base is still placed at 11,000. However, as the index has started moving higher, the base is getting formed near 11,400 as the last three weeks had seen a move around this level.
The highest Call base is still placed at 11,500. "However, no major addition of open interest was seen at this strike, which shows reluctance of Call writing in this market. This can open up further upsides in the coming days.
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