Chandan Taparia of Motilal Oswal said
now the index has to continue to hold above 10,750-10,777 zones to witness an
upmove towards 10,880 then crucial hurdle at 10,925-10,985 zones.
Sunil
Shankar Matkar
It was another rangebound session for the market on Friday as traders
await more December quarter earnings. The Nifty50 closed lower for the second
consecutive session despite positive Asian cues, dragged by select banks and
auto stocks.
The index closed below 10,800 levels and formed 'Hammer' kind of pattern
on the daily charts (which also resembles 'Hanging Man' pattern) and showed
'Doji' formation on the weekly scale. For the week, the Nifty gained 0.6
percent.
After the rangebound trade for last few sessions, the index is expected
to show direction on either side in coming week, experts said, adding earnings
could be key reason for the move.
The Nifty50 after opening marginally higher hit a day's high of
10,850.15, but in morning itself, it drifted lower to touch an intraday low of
10,739.40 followed by small recovery from day's low in late trade. The index
was down 26.60 points to close at 10,795.
"Nifty50 registered a Hammer formation before signing off the last
session of the week as it smartly recovered from day's low of 10,739 levels
where as weekly chart registered a 'Doji' with positive close after moving in a
narrow range of 137 points throughout the week," Mazhar Mohammad, Chief
Strategist – Technical Research & Trading Advisory, Chartviewindia.in told
Moneycontrol.
He said this kind of narrow ranges pointing towards a possible breakout
in either of the directions in the next week, but long lower shadows,
registered on Nifty in last couple of trading sessions is hinting at a buying
interest on dips around 10,730 kind of levels.
As long as the said level is defended by bulls the possibility of upward
breakout can't be ruled out though such a breakout will be confirmed on a
strong close above 10,870 levels thereby paving the way for a sustainable
upmove, he feels.
Contrary to this a close below 10,700 shall accelerate selling pressure,
he said. For time being, he advised traders to adopt a neutral stance on index
and focus on stock specific opportunities in both directions.
A Hammer which is a bullish reversal pattern is formed after a decline
while a Hanging Man is a bearish reversal pattern. A Hammer consists of no
upper shadow, a small body, and long lower shadow. The long lower shadow of the
Hammer signifies that it tested its support where demand was located and then
bounced back.
A 'Doji' is formed when the index opens and then closes approximately
around the same level but remain volatile throughout the day which is indicated
by its long shadow on either side. It appears like a cross or a plus sign.
India VIX remained flattish and marginally moved up by 0.08 percent at
15.35 levels. VIX has to continue to hold below 16 zones to again get a bounce
back move in the market.
On the option front, maximum Put open interest (OI) was seen at 10,000
followed by 10,500 strike while maximum Call OI was at 11,000 followed by
11,200 strike.
Call writing was seen at 11,000 followed by 10,900 strike while Put
unwinding was seen at most of the immediate strikes. Option band signifies an
immediate trading range in between 10,700 to 10,900 zones.
"Nifty index a small 'Doji' candle on weekly scale which indicates
indecisiveness as follow up is missing on both the side in the market. It has
been flirting to its 50 DEMA and continued its alternative positive and
negative weekly close for ninth week," Chandan Taparia, Associate Vice
President | Analyst-Derivatives at Motilal Oswal Financial Services Limited said.
Now the index has to continue to hold above 10,750-10,777 zones to
witness an upmove towards 10,880 then crucial hurdle at 10,925-10,985 zones
while on the downside, if it fails to hold 10,720 zones then only it can see a
dips towards 10,650-10,600 zones, he added.
Bank Nifty negated its higher highs formation on daily scale but managed
to hold above 27,350-27,400 zones.
The index closed 74.65 points lower at 27,453.90 and formed a bearish
candle on daily scale but formed higher highs-higher lows on weekly scale.
"Now it has to continue to hold above 27,350-27,400 zones to extend
its gains towards 27,750 zones while on the downside support exists at
27,150-27,000 zones," Chandan Taparia said.
Nifty
future closed negative with losses of 0.41 percent at 10,813 levels. Built up
of long positions were seen in ICICI Prduential, Torrent Pharma, Mindtree,
Muthoot Finance, Repco Home, DCB Bank and KPIT Technologies while shorts were
seen in Arvind, Just Dial, TCS, IndusInd Bank, Tata Motors and IndiGo.
No comments:
Post a Comment