Nifty opened negative and drifted towards the 11,850 mark in the first half of Wednesday’s session. However, it saw a sharp recovery from lower levels and extended the gains towards the psychologically important 12,000 mark.
The index has been finding multiple supports near the 11,850 mark for last five sessions and as long as it holds the same, it has the potential to even head towards the lifetime high of 12,103 mark.
It formed a bullish candle on the daily chart, as every dip got bought into and support levels shifted higher gradually. Nifty has been respecting the rising support trend line and it has to hold above 11,850 level to witness an up-move towards 12,000 and then 12,103 levels, while on the downside, major support is seen at 11,780 level.
On the monthly options front, maximum Put open interest was at 11,600 followed by 11,500 level, while maximum Call open interest was at 12,000 followed by 11,800 levels. There was Put writing seen at 11,700 and 12,000 levels and Call writing was seen at 12,400 followed by 12,500 levels. The options data suggested a broader trading range between 11,800 and 12,200 levels.
India VIX moved down 0.91 per cent to 15.77 level.
Bank Nifty managed to hold the 30,000 level and witnessed a sharp recovery toward the 30,700 mark. It has been respecting the rising support trend line on the daily scale while supports remained intact to drive the next leg of rally. It formed a Bullish Engulfing kind of pattern on the daily scale, with multiple supports at 30,000 level. Now it has to hold above 30,250 level to witness an up-move towards 30,800 and then 31,250 levels, while on the downside major supports were seen at 30,000 level.
Nifty futures closed positive at 12,004 level, with a gain of 0.40 per cent. Long buildup was seen in SRF, Hindalco, Colgate-Palmolive, DLF and Hexaware while shorts were seen in Titan, Chola Finance, Apollo Tyre, Bharti Infratel and CESC.
(Chandan Taparia is Technical & Derivative Analyst at MOFSL. Investors are advised to consult financial advisers before taking an investment calls based on these observations)