Mazhar Mohammad of Chartviewindia.in advised traders to remain neutral on long side whereas positional shorting can be considered on a close below 11,535 levels for bigger targets.
The recovery in the last hour of
trade helped the Nifty50 close in the green for the first time in the
last four consecutive sessions on November 2. The index formed a small-bodied
bearish candle which resembles a Hammer pattern on the daily charts.
The rally in banking &
financials after ICICI Bank earnings lifted sentiment. The index strongly
rebounded from around 50-day simple moving average which is placed at 11,555.
According to experts, this will be a crucial point in the coming
session.
Given the weak market breadth and
the major event of US Presidential Elections tomorrow, the market may see some
volatility.
Considering the major event
ahead, Mazhar Mohammad of Chartviewindia.in advised traders to remain neutral
on the long side whereas positional shorting can be considered on a close below
11,535 levels for bigger targets.
The volatility has been moving
upwards from the last four consecutive weeks ahead of the elections. India
VIX moved up by 1.85 percent from 24.75 to 25.21 levels today.
The Nifty50 opened higher at
11,697.35, but failed to hold gains and tumbled into the red within few
minutes. It hit a day's low of 11,557.40 but managed to get back in the
positive territory in the last hour of trade to hit an intraday high of
11,725.65, before closing 26.80 points higher at 11,669.20.
"Nifty50 appears to be
stabilising around its 50-day moving average as it smartly recoiled after
testing the said average for the second day in a row with a long lower shadow
which resulted in Hammer formation. Despite this intraday recovery, the
advance-decline ratio remained in favour of bears hinting at pain in broader
markets," Mazhar Mohammad, Chief Strategist – Technical Research &
Trading Advisory at Chartviewindia.in told Moneycontrol.
Moreover, as markets are heading
for a major event it may continue to remain volatile and choppy, he feels.
Nevertheless, if bulls manage to
defend 11,500 levels for next couple of trading sessions then a sustainable up
move can be expected in markets and the near-term bullish sentiment shall
get strengthened on a close above 11,750 levels.
However, if the index closes
below 11,500, then it shall accelerate the pace of fall with initial targets of
11,000, Mazhar said.
Maximum Put open interest was at
11,000 followed by 11,500 strike, while maximum Call open interest was at
12,000 followed by 12,500 strike. Marginal Call writing was seen in 11,600 and
12,100 strike while Put writing was seen at 11,000 then 10,800 strike.
The abovementioned option data
indicated that the Nifty could remain in a wider trading range of 11,400 to
12,000 levels.
Bank Nifty opened strong at
24,367.60 and hit an intraday high of 25,139 as it negated the formation of
lower highs of the last three trading sessions. The index outperformed the
Nifty50 and rallied 991.60 points or 4.15 percent to close at 24,892.50,
forming a bullish candle on the daily scale.
"The index has to continue
to hold above 24,750 to witness an up move towards 25,500 while immediate key
support is seen at 24,500 then 24,250," Chandan Taparia, Vice President |
Analyst-Derivatives at Motilal Oswal Financial Services said.
Positive setup was seen in
Cholamandalam Investment, Havells, Axis Bank, Ashok Leyland, Bajaj Finance,
HDFC Bank, Marico, Voltas, Escorts and Kotak Mahindra Bank while weakness was
seen in Reliance Industries, Eicher Motors, UPL, Aurobindo Pharma and TCS, he
added.
Comments
Post a Comment