Tech View: Nifty forms Bullish Hammer pattern; high volatility a concern
, ETMarkets.com|
Updated: Dec 14, 2017, 06.28 PM IST
NEW DELHI: The Nifty50 index on Thursday staged a smart recovery from the low point of the day and settled 59.15 points, or 0.58 per cent up at 10,252.10. The index opened the day at 10,229.30 and touched a high and a low of 10,276.10 and 10,141.55, respectively.
In the process, an occurrence of long lower shadow was formed on the daily chart, which resembles a hammer on the candles, providing further credibility to the support area.
Milan Vaishnav, Technical Analyst, Gemstone Equity Research and Advisory said, “The frequent validation of the support zone of 10,180-10,200 reinforced the credibility of this support area.”
The exit polls for Gujarat elections might result in some knee-jerk reaction on Friday. However, with the Nifty ending above the 50-DMA, the support zone of 10,180-10,200 will continue to provide strong supports.
“Going in to trade on Friday, some follow-through of short covering, which led to Thursday's recovery, might continue. Area of 10,330-10,360 need to be watched on the upper side,” said Vaishnav.
Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in said, “Nifty50 registered Hammer kind of formation on the charts, as bulls put up a moderately brave face, as they appear to have sensed an opportunity to buy around 10,150 levels ahead of the event. This kind of buying may be in anticipation of a favourable outcome for the market, which is nothing but a victory for the BJP.”
On the option front, maximum Put open interest stood at 10,000 followed by 9,800 strike, while maximum Call open interest was at 10,500 followed by 10,400 strike.
“We have seen fresh Put writing at 10,000 while Call writing is intact at 10,400 and 10,500 strike,” said Taparia.
Volatility index on the NSE, India VIX, moved up by 2.61 per cent to 16.36. Rising volatility is ruling out for any smooth ride in the market and expecting swings to continue going forward for next coming sessions.
“Nifty50, which is moving in a well-defined downsloping channel since the highs of 10,490, needs to register a breakout and sustain above the said channel whose value is placed around 10,350 levels. Technically, such a breakout shall signal the end of a correction which is in progress since November highs. Hence, traders are advised to look for such a sustainable breakout post the exit poll result and create bets accordingly,” said Mohammad.
In the process, an occurrence of long lower shadow was formed on the daily chart, which resembles a hammer on the candles, providing further credibility to the support area.
Milan Vaishnav, Technical Analyst, Gemstone Equity Research and Advisory said, “The frequent validation of the support zone of 10,180-10,200 reinforced the credibility of this support area.”
The exit polls for Gujarat elections might result in some knee-jerk reaction on Friday. However, with the Nifty ending above the 50-DMA, the support zone of 10,180-10,200 will continue to provide strong supports.
“Going in to trade on Friday, some follow-through of short covering, which led to Thursday's recovery, might continue. Area of 10,330-10,360 need to be watched on the upper side,” said Vaishnav.
Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in said, “Nifty50 registered Hammer kind of formation on the charts, as bulls put up a moderately brave face, as they appear to have sensed an opportunity to buy around 10,150 levels ahead of the event. This kind of buying may be in anticipation of a favourable outcome for the market, which is nothing but a victory for the BJP.”
On the option front, maximum Put open interest stood at 10,000 followed by 9,800 strike, while maximum Call open interest was at 10,500 followed by 10,400 strike.
“We have seen fresh Put writing at 10,000 while Call writing is intact at 10,400 and 10,500 strike,” said Taparia.
Volatility index on the NSE, India VIX, moved up by 2.61 per cent to 16.36. Rising volatility is ruling out for any smooth ride in the market and expecting swings to continue going forward for next coming sessions.
“Nifty50, which is moving in a well-defined downsloping channel since the highs of 10,490, needs to register a breakout and sustain above the said channel whose value is placed around 10,350 levels. Technically, such a breakout shall signal the end of a correction which is in progress since November highs. Hence, traders are advised to look for such a sustainable breakout post the exit poll result and create bets accordingly,” said Mohammad.
