19,400-19,450 to be critical zone for either side direction in Nifty
The Nifty50 closed its rangebound session on a positive note and formed a Doji kind of candlestick pattern on the daily charts for yet another session on November 8, indicating the tug-of-war between bulls and bears. The index broadly remained in the range of around 19,400-19,450 throughout the session, which remains critical for either side of the direction of the market.
Given the continuation of higher highs, higher lows for the fifth consecutive session and the index crossing the 21-week EMA (exponential moving average of 19,300), the bulls are still holding the game. Hence if the index manages to give a strong close above 19,450, then the next hurdle is expected at 19,550-19,600 area, whereas in case of downside, 19,300 is the critical support, experts said.
The Nifty50 opened higher at 19,450 and remained rangebound for the entire session before closing with 37 points gains at 19,444.
"The index formed a Doji candle on the daily frame and has been forming higher lows from the last five sessions. Now it has to hold above 19,400 levels, for an up move towards 19,550 then 19,600 levels," Chandan Taparia, Senior Vice President, Analyst-Derivatives at Motilal Oswal Financial Services said.
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However, supports are gradually shifting higher and are placed at 19,333 then 19,250 levels, he added.
The Options data continued to indicate that 19,500-19,600 is going to be crucial resistance for further upside, while 19,400 seems to be an immediate support, followed by critical at 19,300 mark.
On the weekly Options data front, 19,500, 19,600 and 19,700 strikes owned the maximum Call open interest, with meaningful Call writing at similar strikes in the same sequence. However, on the Put side, the maximum open interest was visible at 19,300 strike, followed by 19,400 and 19,200 strikes, with writing at 19,400 strike, then 19,300 strike.
Bank Nifty
The Bank Nifty closed lower for the first time in the last five straight sessions and fell 79 points to 43,659 on profit taking. The index has formed a bearish candlestick pattern with a lower shadow on the daily scale, but held 21-day EMA (43,550) for three days in a row, which can be a support going ahead, while 44,000 is the clear resistance area.
"The Bank Nifty traded sideways throughout the day. Nevertheless, the prevailing trend appears to be bullish as the index closed above a critical short-term moving average," Rupak De, senior technical analyst at LKP Securities said.
He feels the support is established at 43,500 on the lower end. "As long as the index maintains its position above 43,500, a buy-on-dips strategy is considered appropriate. On the higher end, there is potential for the index to advance towards 44,200," he said.
Meanwhile, the buying continued in broader markets for the fifth consecutive session with the Nifty Midcap 100 and Smallcap 100 indices rising 1 percent and 0.7 percent respectively as breadth remained in favour of bulls.
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Technical View | 19,450 to be critical for Nifty50 going ahead - Moneycontrol
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