Oct 30, 2017 04:40 PM IST | Source: Moneycontrol.com
Technical View: Nifty closes at fresh closing high; makes small bodied candle
According to Mazhar Mohammad of Chartviewindia.in, as market breadth remained robust with almost 2 stocks advancing for every single scrip declining some can conclude that stock-specific opportunities are still available in this market.
Kshitij Anand Moneycontrol News
The Nifty50 which started with a gap on the higher side held on to momentum and hit a fresh record high of 10,384.50 in trade on Monday. The index pared some gains towards closing and made a small-bodied candle on the daily candlestick charts.
The index witnessed some selling pressure the moment, the index came near its crucial resistance level of 10,400. It looks like upside may remain capped for the index in the zone of 10,400-10,600 because of multiple resistance zones.
Investors who went long on the index should maintain a strict stop loss below 10,237 for all long positions. A close below this level could lead to some bit of selling pressure.
“Albeit Nifty50 once gain closed at an all-time high it confined its move to 40 points narrow range suggesting that market participants are clueless about further direction. Moreover, in a sense, it topped out on an intraday basis in the first hour itself,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“However, as market breadth remained robust with almost 2 stocks advancing for every single scrip declining some can conclude that stock-specific opportunities are still available in this market,” he said.
Mohammad further added that traders will be better off by focussing on individual opportunities whereas a weakness will get confirmed only on a close below 10237 levels. Upsides in the index may get capped in this zone of 10400 – 600.
India VIX moved up by 5.51 percent. Volatility moved up even after the positive market stance could be a sign of caution. For the momentum to continue, volatility has to cool down to extend this rally else a consolidation or pause could be seen in the market, suggest experts.
On the options front, maximum Put OI was seen at strike price 10000 followed by 10200 while maximum Call OI was seen at 10400 followed by 10500 strikes.
Fresh Put writing was seen at 10300, 10400 and 10200 strikes while Call writing is seen at 10400 strikes. On the technical charts, Nifty formed a small-bodied candle but till it doesn’t negate the positive momentum, the trend could remain positive,” Chandan Taparia, Derivatives and Technical Analyst at Motilal Oswal Securities told Moneycontrol.
“It has to continue this formation to extend this move towards 10400 then 10500 while on the downside support exists at 10300 then 10250,” he said.