RSI also turned northwards and gave positive crossover with its average, which has bullish implication.
Chandan Taparia
Nifty index continued its positive momentum for the second consecutive session and headed towards 10,250 zone.
It continued to make higher highs on hourly scale as the day progressed and concluded the session near to its day's high on June 19.
Index has been moving in a rising channel on daily scale by connecting swing lows of 7,511, 9,004, 9,544 and 9,845 levels and recently it has turned from its support zone with hold of 50 DEMA.
We witnessed follow up buying post a breakout from a Triangle pattern on intra-day scale which indicates that momentum may continue. RSI also turned northwards and gave positive crossover with its average, which has bullish implication.
Now, it has to continue to hold above 10,180 levels to extend its move towards 10,333 then 10,500 zone, while support is now shifting higher to 10,040 and 10,000 levels.
India VIX fell by 2.796 percent from 30.82 to 29.96 levels on weekly basis. Overall lower volatility provides comfort to bulls to form the higher market base.
On monthly Options front, maximum Put open interest is at 9,000 followed by 9,500 strike, while maximum Call open interest is at 10,500 followed by 11,000 strike. We have seen Call writing in 11,000 followed by 10,600 strike while meaningful Put writing was seen in 10,000 followed by 10,100 strike. Option data suggests a wider trading range in between 9,900 to 10,500 zone.
Bank Nifty continued its positive momentum and headed towards 21,500 zone. It has been making higher lows from last three sessions and formed a bullish candle on daily and weekly scale. Eventually, it concluded the week with the gains of 3.31 percent and given a highest weekly close in last seven weeks. Bank Nifty has surpassed its falling supply trend line on daily scale and also making a rounding formation. At current juncture, till it holds above 20,800-21,000 zone, it has potential to move towards 21,800 - 22,000 zone.
Looking at current chart structure, traders are advised to trade with positive bias and use any small declines as buying opportunity.
Stock specific positive setup is seen in Reliance Industries, Bajaj Finance, Glenmark Pharma, ICICI Bank, Maruti Suzuki, Equitas Holdings, Ujjivan Financial Services, M&M Financial, Ramco Cement, UltraTech Cement, HDFC Bank and Bharti Airtel. We have seen a good momentum in many small and midcap stocks with better advance:decline ratio which suggests that bullish stance could continue going forwards for next couple of sessions.
(The author is Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.)
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