Technical View: Nifty forms bullish candle, likely to move towards 15,900

The Nifty50 recouped the day’s losses as it gained strength late afternoon to close above the 15,700-mark, driven by banking & financials, metals, select FMCG and pharma stocks.

The index formed a bullish candle on the daily chart, as the closing was higher than the opening level. Experts expect the index to hit the 15,900-mark again if it closes above 15,761 in the coming sessions.

For the time, traders should remain neutral on the index till volatility subsides by shifting focus to stock-specific opportunities, Mazhar Mohammad of Chartviewindia said.

The Nifty opened sharply lower at 15,525.85 and hit the day's low of 15,505.65 but immediately started showing recovery in the morning to turn finally positive in one-and-half-hour of trade. The index hit an intraday high of 15,765.15 in late trade and rose 63.10 points to close at 15,746.50.

"Nifty50 almost recouped all the losses witnessed in last Friday's trading session, thereby strengthening the chances of registering a near-term bottom around 15,450 levels. This will be further confirmed if Nifty registers a sustainable close above 15,761 levels which should ideally pave the way for the test of recent corrective swing highs placed around 15,900 levels," Mazhar Mohammad, Chief Strategist–Technical Research & Trading Advisory at Chartviewindia.in told Moneycontrol.

However, in the next couple of sessions Nifty should ideally trade inside a large trading range of 310 points, as was seen on June 18, he said.

"On the technical indicator/oscillator charts signals are turning mixed as weekly MACD chart generated a buy signal giving advantage to the bulls in this volatile phase," he said.

India VIX moved up 1.76 percent from 14.80 to 15.06 levels. The options data indicates that the Nifty could continue to trade the 15,500-16,000 range.

On the options front, maximum Put open interest was seen at 15,500 followed by 15,000 strike while maximum Call open interest was seen at 16,000 followed by 15,800 strike. Call writing was seen at 16,000 then 15,900 strike while noticeable Put writing was seen at 15600 then 15500 strike.

Bank Nifty opened negative at 34,109.45 but managed to respect the previous day's low of 34,900 and recovered well by around 1,000 points from lower levels. It took support near to its 50 DEMA, closing 313.30 points higher at 34,871.30 and formed a Bullish Engulfing pattern after the lower top-lower bottom of the last 11 trading sessions.

"The index has to hold above 34,500 levels to move towards 35,250 and 35,500 levels, while on the downside, support is seen at 34,250 and 34,000 levels," said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.

On the stock front, a bullish setup was seen in GMR Infrastructure, NTPC, NMDC, Piramal Enterprises, United Breweries, Max Financial Services, DLF, Torrent Power, Tata Power, Bharat Electronics, HUL, Titan, SBI, Bajaj Finserv, Bata India, Bandhan Bank, Gujarat Gas, Pidilite Industries, Sun TV Network, Reliance Industries and Grasim. Weakness was seen in UPL, PVR, SRF and Colgate Palmolive.

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