The Nifty50 regained momentum after significant volatility in the early hours of trading and reclaimed 18,100 on December 27th, continuing the uptrend for the second consecutive session on value buying in quality stocks following a recent correction. The Nifty opened higher at 18090 and corrected to 17967, but after an initial hour of ebb and flow, the index gained momentum, climbing as high as 18149. It finally settled at 18132, up 118 points before the monthly F&O -Expiry was scheduled Thursday. The index has formed a bullish candle on the daily charts, with a long lower shadow suggesting support buying from the lower levels, with a higher high formation. So if the index holds above 18050 then 18150 or a 50 day simple moving average (DMA or SMA) could be the next target followed by 18300 with a crucial 17950-17900 support area. Momentum oscillator RSI (Relative Strength Index) at 45 on daily and 56 on weekly charts are also showing an upward trend, suggesting further upside in the coming sessions. After a promising reversal formation, the market held the uptrend formation throughout the day. The higher bottoming intraday suggests a continuation of a pullback rally in the near future. For trend-following traders, 18,000 would act as a sacrosanct support level, above which the index could rally to a 50-day SMA (simple moving average) or 18250. In case of further uptrend, the index could climb to 18400. Options data indicated the expected trading range for the Nifty50 for the coming sessions, moved up from 17,800-18,200 to 17,800-18,300. On the options front, we have seen the maximum call open interest at 18,200 strike followed by 18,500 strike, with call writing at 18,350 strike and then 18,150 strike. On the put side, maximum open put interest was seen at 18,000 strikes followed by 17,800 strikes, with writes at 18,000 strikes and then 18,100 strikes. India VIX continued to decline 4.03 percent to 15.29 from 15.93, making the trend favorable for bulls and helping them to buy dips. With the uptrend for the second straight session, the supports have shifted to the upside. Now it needs to hold above the 42,750 level to make an upward move towards 43,250 and 43,500 while on the downside support lies at 42,500 and 42,250.
Resistance: 18200, 18350, 18500
Support: 18050, 17900, 17750
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