It was a great start to the June series, as finally, the Nifty50 closed near its much-awaited strong resistance of 18,500 with one percent gains on May 26, after around a couple of weeks' consolidation. The rally across sectors with a significant fall in volatility supported the market sentiment. The index opened higher at 18,368 and gradually as the day progressed, it extended its upward journey up to 18,509 intraday. On the final tally, it surged 178 points to 18,499.3, the highest closing level since December 14 last year. The Nifty50 has formed a bullish candlestick pattern on the daily charts and negated lower highs lower lows formation of the previous two consecutive sessions, with staying well above all key short-term moving averages (9 and 21-day EMA - exponential moving average). Considering the roaring bulls, the next target to watch out for would be 18,700, the high of mid-December, with immediate support of the 18,400 mark, experts said. The index climbed 1.6 percent for the week and formed a long bullish candlestick pattern on the weekly scale, maintaining higher highs formation for the ninth consecutive week. "The Nifty has been sustaining above a critical moving average, indicating a strong position," Rupak De, Senior Technical at LKP Securities said. He feels the trend is expected to remain positive as long as the index sustains above the support level of 18,400. On the higher end, there is a resistance level at 18,700, he said. Options With today's healthy rally, the Option data indicated that the support and resistance levels have shifted higher to 18,400-18,300 and 18,700-19,000 levels respectively, for the June series. We have maximum Call open interest at 19,000 strike, followed by 18,700 strike & 18,500 strike, with meaningful Call writing at 18,700 strike, then 18,800 strike. On the Put side, the maximum open interest was at 18,400 strike, followed by 18,300 strike & 18,200 strike, with writing at 18,400 strike, then 18,300 strike. "Nifty might face some near-term resistance between 18,700 and 18,800 but that would only be a speed-breaker in the scheme of things," Rahul Ghose, Founder & CEO at Hedged said. He further said the open interest of the Puts has already started rising in the June month expiry right from the 18100, 18200 and 18,300 levels, and the final push will come once you see the 18,500 Puts get written. Bank Nifty Bank Nifty closed above the 44,000 mark, rising 337 points to 44,018 after consolidation on May 16, and formed a bullish candlestick pattern on the daily charts by making higher high, higher low formation and getting back above 9 EMA (43,793) and taking support at 21 EMA (43,424) On a weekly scale, it formed a Bullish Pin Bar with a long lower shadow as buying was visible at lower zones, as it gained 0.11 percent. "Now it has to continue to hold above 43,750 levels, to make an up move towards 44,144, then 44,500, whereas on the downside support is expected at 43,600, then 43,500 levels," Chandan Taparia, Senior Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said. The volatility cooled down considerably in the last two days, giving more power to bulls. India VIX, the fear index dropped by 4.95 percent to 11.90 levels, from 12.52 levels, while for the week, it was down 3.25 percent. Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Technical View | Nifty hits over 5-month high, bulls may take index towards 18,700 - Moneycontrol
Read More
