A 'Long White Day' signifies that the market witnessed sustained buying interest from the bulls for most part of the trading day, which is a bullish sign. The index managed to reclaim 10,000 levels as well as 200-days exponential moving average (DEMA) placed at 10,092.
The Nifty, which started on a muted note, gained momentum in the second half of the trading session on Monday, fuelled by short covering in banks and financials. The index made a ‘Long White Day’ kind of pattern on the daily charts.
A 'Long White Day' signifies that the market witnessed sustained buying interest from the bulls for most part of the trading day, which is a bullish sign. The index managed to reclaim 10,000 levels as well as 200-days exponential moving average (DEMA) placed at 10,092.
Such volatility was expected ahead of the early expiry and hence such strong price action would force bears to run for cover. As long as global cues remain stable, chances are that the bias could remain tilted in favour of bulls.
The 50-share index opened at 9989 and slipped to an intraday low of 9,958 before bulls stormed D-Street and took the index back above 10,000. The index recorded an intraday high of 10,143 before closing the day 132 points higher at 10,130.
“The Nifty registered a Long White Day kind of formation as it witnessed a powerful short covering rally which has erased the losses of last Friday’s session and went on to close above the critical moving averages on short-term charts suggesting a near-term bottom to be in place around 9950 levels,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“A confirmation of a possible bottom will only come on a close above 10227 levels. However, this kind of strong momentum ahead of expiry session shall create enough panic among bears forcing them to run for cover in next few trading sessions,” he said.
Mohammad further added that in the absence of any overnight negative global cues and technically sustaining above 10227 levels this rally shall get extended initially up to 10390 levels. “At this juncture, it can be difficult to project a trend reversal but certainly for time being the ball is in the court of bulls,” he said.
On the options front, maximum Put open interest is placed at 10,000 followed by 9,900 strikes while maximum Call open interest is placed at 10,500 followed by 10,400 strikes.
Massive Put writing was placed at 10,000 and 10,100 strikes while Call unwinding is seen at all the immediate strike which suggests an extension of bounce back.
“Option band signifies a trading range between 10,000 to 10,250 levels. The Nifty index managed to hold previous day’s low of 9951 zones and witnessed a strong rebound of around 200 points from its intraday low levels,” Chandan Taparia, Derivatives, and Technical Analyst at Motilal Oswal Securities told Moneycontrol.
“It formed a Bullish Candle on the daily scale and headed towards its immediate hurdle of 10141 marks. Now it has to hold above 10141 to extend its bounce towards 10222 and 10276 zones while on the downside supports are seen at 10050 and 9980 zones,” he said.