The Nifty50, as expected, made another attempt to touch its previous intraday all-time high after smart recovery in the previous session, and failed, but managed to end at a fresh record closing high on June 21. Select banking & financial services, technology and oil & gas stocks supported the market.
The index opened higher at 18,849 and hit a fresh high of 18,876 this calender year but could not sustain those gains for long and hit a day's low at 18,795. However, it has seen a recovery in late-morning deals and remained in positive terrain amid volatility in the rest of the session.
Finally, it closed with 40 points gains at 18,857, the new closing high, while the BSE Sensex made an intraday life high of 63,588 and ended above 63,500 levels for the first time.
The Nifty50 has formed a Doji sort of candlestick pattern on the daily charts, indicating the tug-of-war between bulls and bears, but registered higher high, higher low formation. Considering the repeated attempt to witness an upside breakout, the index seems to be preparing a firm ground to climb towards the 18,900-19,000 area, while having strong support at the 18,800-18,600 zone, experts said.
"The formation of high wave or Doji type of candle pattern at the highs signals the emergence of volatility at the highs," Nagaraj Shetti, Technical Research Analyst at HDFC Securities said.
Nifty is currently placed at the edge of moving into a new all-time high above 18,887 levels (top of December 1, 2022).
"The market is repeatedly making an attempt to witness upside breakout, but was not able to succeed due to lack of strength at the hurdle," he said. But "The underlying trend of Nifty continues to be positive with rangebound movement," he added.
He feels a decisive move above the 18,900 level is expected to open the next upside towards 19,100-19,200 levels in the near term, whereas immediate support is at 18,730 level.
As per weekly Options data, the 19,000 strike enjoys the maximum Call open interest, followed by 18,900 strike, with meaningful Call writing at 18,900 strike, then 19,100-19,200 strikes. On the Put side, the maximum open interest was at 18,800 strike, followed by 18,700 strike, with writing at 18,800 strike, then 18,400 strike.
The above Option data also indicates that the Nifty50 may move towards 18,900-19,000 levels soon, with the crucial support of the 18,800-18,700 zone.
Bank Nifty
The Bank Nifty has also seen a similar kind of behaviour but respected the previous day's low of 43,346. The index climbed 93 points to 43,859 and also formed a Doji kind of candlestick pattern on the daily scale, making higher high and higher low formations.
The index is currently witnessing a continued battle between the bulls and the bears. "It has a support level of 43,500, which is indicated by the presence of maximum Put writing. On the other hand, there is resistance at 44,000 strike, where the highest open interest was seen on the Call side," Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities said.
He feels a break on either side of this range is expected to result in trending moves. Within the range, it is advisable to adopt a buy-on-dip approach, he said.
The broader markets sustained an uptrend for the eighth consecutive session, with the Nifty Midcap 100 and Smallcap 100 indices rising 0.8 percent and 0.1 percent, respectively. Both indices have formed a Three White Soldiers candlestick pattern on the monthly charts, which is a positive sign.
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