The Nifty made a strong start to the week rising more than half a percent to 18, 599 on May 29, tracking positive Asian cues following the tentative debt ceiling deal in the US and a new high for the banking index at home.
All sectors, barring information technology and oil & gas, supported the index that hit the day’s high of 18,641, also its highest level this calendar year.
After opening above 18,600, the index moved in a 50-60 point range. It closed 99 points higher at 18,599 and formed a Doji candlestick on the daily charts, indicating indecisiveness among bulls and bears.
The sentiment, however, remains positive. The Nifty is inching towards 18,700-18,800 and possibly 18,887, its all-time high hit in December, but not before some consolidation, experts said. The level of 18,400 has emerged as the support on the lower side.
"… the Bank Nifty has now entered uncharted territory after a long-awaited period. We anticipate that the Nifty index will also follow suit and test the all-time high levels of 18,887.60 and potentially go even higher in the near future," Rajesh Bhosale, Technical Analyst, Angel One, said.
The recent sharp rise in prices, which has led to short-term indicators entering the overbought zone, and subdued intraday movements may slow down the Nifty’s march, he said.
It would be prudent to take advantage of dips to enter long positions and take profits at higher levels, Bhosale said.
The resistance of around 18,450-18,400 will now act as a support, while the 18,780-18,900 range will serve as the immediate resistance, he said.
On the options front, the maximum Call open interest was at 18,800 strike, followed by 18,600 and 18,700 strikes, with meaningful call writing at similar strikes in similar sequence.
On the put side, 18,300 strike owned maximum open interest, followed by 18,400 strike and 18,000 strike, with writing at 18,600 strike, then 18,500 strike.
The data indicates that 18,700-18,800 is expected to be the resistance zone and 18,400-18,300 support zone for the index.
Banking index
Bank Nifty opened gap-up at 44,277 and extended gains to hit a new intraday high of 44,483 but then consolidated in a narrow range of 150 points. It closed 294 points up at a new closing high of 44,312.
The index formed a small-bodied bullish candle with a long upper shadow on the daily scale, indicating profit-taking at higher levels.
"Now it has to continue to hold above 44,144 levels to make an up move towards 44,500 then new life high of 44,750, while on the downside support is expected at 44,144, then 44,000 mark," Chandan Taparia, Senior Vice President | Analyst-Derivatives at Motilal Oswal Financial Services said.
India VIX, the volatility gauge, was up by 3.34 percent to 12.30 from 11.90 levels.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.