Nifty50 gained 3.70 points on Friday and rallied 123.4 points during the week to close at 11,680.50.
The Nifty50 after opening gap down traded in a big range of around 90 points throughout the session and closed flat with a positive bias on Friday. The consolidation for last three consecutive sessions indicated that traders turned cautious after sharp run and ahead of Q1 GDP data due later today.
The index made small bullish candle and formed 'Long Legged Doji' pattern on the daily charts. On the weekly charts, it formed 'Shooting Star' kind of pattern.
A typical long-legged Doji pattern is formed when the opening price is almost equal to the closing price but there was a lot of intraday movement on either side.
A 'Shooting Star' pattern is formed when the index comes under selling pressure as traders start booking profits at higher levels.
This pattern is usually formed in an uptrend and is treated as a reversal pattern, but it would require confirmation before we can conclude that the trend will get reversed in near future.
The Nifty50 opened at 11,675.85 and closed at 11,680.50. After opening with negative bias, the index immediately rebounded to hit an intraday high of 11,727.65 but at the end of first one hour of trade it corrected to hit day's low of 11,640.10. Overall it remained rangebound throughout the session.
The index gained 3.70 points on Friday and rallied 123.4 points during the week to close at 11,680.50.
The Nifty 50 appears to be chalking out a consolidation zone, for last 4 trading sessions, between 11,760–11,640 levels as it recoiled on Friday after testing critical supports placed on short term charts before signing off the session with a Long Legged Doji kind of formation on daily charts where as a Shooting Star was registered on weekly charts with a long upper shadow suggesting intra week profit booking at higher levels.
He said post Friday’s price action stakes are favouring bulls in the immediate session and hence sustaining above 11,640 levels there is a fair chance of testing 11,760 in next couple of sessions.
Unless the said index closes below 11,628 bears will not able snatch the game away from bulls, he feels. According to him, in case if 11,760 is decisively cleared then next target can be close to 11,950 kind of levels.
Hence, traders should focus on stock specific opportunities with a stop below 11,640 on closing basis, Mazhar advised.
India VIX increased 2.17 percent to 12.68 levels.
On the options front, maximum call open interest (OI) of 27.79 lakh contracts was seen at the 11,800 strike price, which will act as a crucial resistance level for September series, followed by 12,000 (with 26.46 lakh contracts in OI) and 11,700 (20.55 lakh contracts).
Maximum put open interest of 32.71 lakh contracts was seen at the 11,600 strike price which will act as a crucial support level for September series, followed by the 11,500 (32.04 lakh contracts) and 11,400 (29.92 lakh contracts).
The Nifty has been flirting with the lower end of a medium term rising channel for last couple of sessions. After a tough battle in the last session, the bulls managed to contain the index within the channel. The bulls managed to defend the swing high of 11620, which is a positive sign for the short term up trend to persist.
Consequently the index posted a positive weekly close for the sixth consecutive week. The week gone by witnessed strength in the broader market as well.
In terms of the wave structure, a leg on the upside looks pending in Nifty in order to complete an Impulse structure. "To complete the same the index needs to take out the recent high of 11,760. From short term perspective the index is expected to head towards 11,840.
MORE WILL UPDATE SOON!!
No comments :
Post a Comment