The Nifty50 closed 127 points higher at 17,525. It hit an intraday high of 17,548 and a low of 17,359. Bulls helped the index to close above the 17,500 resistance level, which is a positive sign.
The market will remain closed on Tuesday on account of a public holiday.
The Nifty index opened flat and moved in the positive direction for the entire session and headed towards 17,550. The next major resistance is placed above 17,700 on the upside, while support has been shifting higher towards 17,300, suggested experts.
“Nifty formed a Bullish candle on a daily scale and gave the highest closing of the last 81 sessions,” said Chandan
, Derivative & Technical Analyst, MOSL.
“It has to hold above 17,500 zones for an up move towards 17,650 and 17,777 zones, whereas support is intact at 17,350 and 17,250 zones,” he added.
Sectorally, buying was seen in capital goods, power, utilities, and metal space, while some selling pressure was visible in oil & gas stocks.
India VIX was up by two per cent from 18.91 to 19.30 levels. Volatility spiked during the day, giving some discomfort to the bulls and needs to come down for market stability.
On the options front, maximum Call OI is placed at 18,000 and then towards 17,500 strikes, while maximum Put OI is placed at 16,500 then 17,000 strikes.
“Option data suggest an immediate trading range between 17,300 to 17,700 zones while a broader trading range in between 17,000 to 18,000 zones,” said Taparia.
Book Partial Profits:
After the recent run-up seen so far in August, technical experts suggested traders pare long positions and trail stop losses. The Nifty50 has rallied more than two per cent or more than 350 points in just six trading sessions.
A close above 17,500 on Monday suggested that momentum is intact, but short-term traders can look at booking partial profits as they are trading near overbought levels.
The Relative Strength Index (RSI) is at 75.9. RSI above 70 is considered overbought. This implies that stock may show pullback, Trendlyne data showed.
“The momentum readings remain in the overbought zone, so the up move could now get concentrated to fewer sectors and stocks,” Ruchit Jain, Lead Research,
5paisa.com, said.
“On the higher side, the trendline resistance will be the immediate zone to watch out on the higher side, which is around 17,700-17,750, while the support base has now shifted higher to 17,350-17,300 range,” he said.
“Traders with long positions can now trail their stop loss higher to 17,300 while profit booking is advisable at higher levels,” recommends Jain.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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