The Nifty50 opened higher and gradually extended gains to close above the 14,300-mark for the first time on January 8. Auto, IT, pharma and select banking & financials and FMCG stocks led the rally. Positive global cues amid economic recovery hopes also supported the rally.
The Nifty50 opened strong at 14,258.40 and maintained an upward rally to touch a new high of 14,367.30. The index climbed 209.90 points, or 1.48 percent, to end at a record closing high of 14,347.30. Experts feel if the current momentum sustains, the Nifty can go beyond 14,500 in the coming sessions.
The index formed a bullish candle on the daily as well as weekly charts as the closing was higher than the opening levels. The index gained 2.3 percent for the week.
Index traders with a high-risk appetite should go long by making use of intraday dip towards 14,250 levels, with a stop below 14,200 and look for a modest target placed in the 14,450–14,500 zone, Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in told Moneycontrol.
“The bulls continued their relentless strength after a brief pause of the two sessions to hit yet another milestone with first-ever close above 14,300 levels. In this process, strength in the markets continued for 10th week without any meaningful correction, from the lows of 11,557 levels which makes the bulls vulnerable for a sudden and sharp falls,” Mohammad said.
It will be prudent for traders to trail and fit their stop losses from time to time to the previous sessions low, he said. According to him, in the next trading session, if the Nifty sustains above 14,221, then it can head towards its next destination of 14,500 levels.
However, if it breaks 14,221, then some weakness may emerge that can initially pull down the index towards 14,000 levels.
India VIX was marginal up by 0.10 percent from 20.62 to 20.64 levels.
On the options front, maximum Put open interest was seen at 13,000 followed by 14,000 strike, while maximum Call open interest was at 14,000 followed by 14,500 strike. Minor Call writing was seen at 14,400 then 14,700 strike, while Put writing was seen at 14,200 then 14,300 strike.
The abovementioned option data indicated a wider trading range for the Nifty at 14,000 to 14,600 for the coming sessions.
The Bank Nifty opened higher at 32,298.05, which was also an intraday high, but could not sustain at higher zones and slipped thereafter. The index gained 128.20 points to close at 32,084.20 and formed a bearish candle on the daily scale as it closed lower than opening levels, but continued its higher highs from the last five trading sessions.
“The index has to continue to hold above 31,750 levels to witness an upmove towards 32,500 and 32,613 while on the downside support is seen at 31,500 and 31,200 levels,” Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
Positive setup was seen in Maruti Suzuki, Tech Mahindra, Wipro, MRF, UPL, Page Industries, Havells, Hero MotoCorp, Infosys, Eicher Motors, SRF, Balkrishna Industries, Mindtree, Power Grid, ACC, M&M, Sun Pharma, UltraTech Cement, TVS Motor, Voltas and Bajaj Auto. Weakness was seen in Vodafone Idea, Manappuram Finance, SAIL, Canara Bank, Aurobindo Pharma and ITC, he added.
