The Nifty50 saw a smart recovery in the last hour of trading and closed above the 18,800 mark on June 20, backed by buying in most of the key sectors barring pharma.
The index opened flat at 18,752 and corrected up to 18,661 in the morning, but it saw a gradual recovery in late-morning deals and finally turned positive in the last hour. It settled at 18,817, up 61 points and formed a bullish candlestick pattern with a long lower shadow on the daily charts, indicating support-based buying at lower levels, while there was a Double Bottom kind of pattern formation on the hourly charts, raising the possibility of a further uptrend.
The index has taken support at 18,650 and smartly defended 18,700. Considering the current strength in the market with sustainable higher highs and higher lows formation since March this year, the Nifty50 is likely to make a fresh all-time high soon, experts said.
"A reasonable positive candle was formed on the daily chart with a long lower shadow. Technically, this pattern indicates the strength of a near-term uptrend in the market with a buy-on minor dips opportunity. Hence, one may expect Nifty to zoom into all-time highs (above 18,887-top of December 1, 2022) in the next few sessions," Nagaraj Shetti, Technical Research Analyst at HDFC Securities said.
He feels the near-term uptrend in Nifty remains intact. "One may expect Nifty to reach up to 19,100-19,200 levels in the next 1-2 weeks. Immediate support is placed at 18,650 levels," he said.
Weekly Options data showed that the maximum Call open interest was at 19,000 strike, followed by 18,900 and 18,800 strikes, with Call writing at 19,000 strike, then 19,500 strike, whereas the maximum Put open interest was at 18,700 strike, followed by 18,800 and 18,600 strikes, with Put writing at similar strikes.
This means that the possibility of the index moving towards 19,000 in the coming sessions may be looking high, with a crucial support area of 18,800-18,600 levels.
Bank Nifty
Bank Nifty has also seen a similar kind of bullish candlestick pattern formation after taking support at the recent low of around 43,400 levels. The index bounced back in the last hour of trading and closed with 133 points gains at 43,766.
"Currently, the index is trading within a broad range between 43,400 and 44,000. A breakout on either side of this range is likely to result in trending moves," Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities said.
He feels as long as the support level of 43,400 is held, a buy-on-dip approach is suggested. Once the index surpasses the level of 44,000 it will witness sharp short covering on the upside towards 45,000 levels, he said.
The broader markets remained strong and outperformed benchmarks. The Nifty Midcap 100 and Smallcap 100 indices gained half a percent each.
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