Technical View: Nifty forms Hanging Man pattern, 11,784 crucial for further upside
Traders to create fresh longs by making use of dips into the 11,750–11,700 zone.
It was a volatile session on October 30 ahead of the expiry of futures and options contracts for the month but the Nifty rallied for the fourth day in a row on the talk of more tax sops for equity markets.
The index closed above 11,800 levels but formed a bearish candle, which looked like a Hanging Man pattern on the daily charts as the closing value was lower than the opening tick.
Experts expect consolidation in the coming days and feel 11,784, which was October 30 low, could be a crucial point for a further upside.
A Hanging Man is a bearish reversal candlestick pattern that is usually formed at the end of an uptrend or at the top (around 754-point rally from its recent low of 11,090 recorded on October 9).
In a perfect Hanging Man pattern either there will be a small upper shadow or no upper shadow at all, a small body and long lower shadow.
India VIX increased by 1.45 percent to 16.65 levels.
The Nifty opened higher at 11,883.90 and remained strong for the major part of the session. It touched an intraday high of 11,883.95 in the afternoon trade and closed 57.20 points lower at 11,844.10.
"The Nifty50 registered Hanging Man kind of formation suggesting exhaustion of current leg of the upswing. Usually, this kind of formation occurs around short-term tops. Hence in the next trading session, sustaining above 11,784 levels is critical to retain a positive bias. In such a scenario, the market can witness sideways move as some of the momentum oscillators on lower time-frame charts are nearing over-bought zones
Owing to expiry-related reasons, if the Nifty sustains above 11,884, on intraday basis, then an initial target of 11,981 can be expected. A breach of 11,784 levels on the downside can trigger profit booking in the near-term
Despite weak formations on the daily charts, the larger trend would continue to be positive and post expiry session, if the market sustains above 11,800 levels then new life-time highs beyond 12,103 can be expected sooner rather than later
Traders to create fresh longs by making use of dips into the 11,750–11,700 zones.
The options data suggests a shift in the trading range for the Nifty to 11,750 to 11,950 levels.
On the monthly options front, maximum Put open interest was seen at 11,800 followed by 11,700 strike, while maximum Call open interest was seen at 12,000 followed by 11,800 strike.
Call writing was seen at 11,850 then 11,750 strike, while meaningful Put writing was seen at 11,800 then 11,850 strike.
The Bank Nifty continued its positive momentum for three consecutive sessions and extended gains towards 30,150 levels. However, it traded in a wider trading range between 29,750 and 30,150 for most of the day.
The index closed 0.38 percent higher at 29,987.50 and formed a Doji candle on the daily scale, as dips were being bought into while selling pressure was seen at higher levels.
"Now it needs to continue to hold above 29,700 to witness an upmove towards 30,250 then 30,500 levels, while on the downside, supports are seen at 29,750, then 29,500 levels
DISCLAIMER
The suggestions made herein are for information purposes and are not recommendations to any person to buy or sell any securities. The information is derived from various sources that are deemed to be reliable but its accuracy and completeness are not guaranteed. The company does not accept any liability for the use of this information. Readers of this information who buy or sell securities based on the information are solely responsible for their actions. And we won't be liable or responsible for any legal or financial losses made by anyone.
Traders to create fresh longs by making use of dips into the 11,750–11,700 zone.
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It was a volatile session on October 30 ahead of the expiry of futures and options contracts for the month but the Nifty rallied for the fourth day in a row on the talk of more tax sops for equity markets.
The index closed above 11,800 levels but formed a bearish candle, which looked like a Hanging Man pattern on the daily charts as the closing value was lower than the opening tick.
Experts expect consolidation in the coming days and feel 11,784, which was October 30 low, could be a crucial point for a further upside.
A Hanging Man is a bearish reversal candlestick pattern that is usually formed at the end of an uptrend or at the top (around 754-point rally from its recent low of 11,090 recorded on October 9).
In a perfect Hanging Man pattern either there will be a small upper shadow or no upper shadow at all, a small body and long lower shadow.
India VIX increased by 1.45 percent to 16.65 levels.
The Nifty opened higher at 11,883.90 and remained strong for the major part of the session. It touched an intraday high of 11,883.95 in the afternoon trade and closed 57.20 points lower at 11,844.10.
"The Nifty50 registered Hanging Man kind of formation suggesting exhaustion of current leg of the upswing. Usually, this kind of formation occurs around short-term tops. Hence in the next trading session, sustaining above 11,784 levels is critical to retain a positive bias. In such a scenario, the market can witness sideways move as some of the momentum oscillators on lower time-frame charts are nearing over-bought zones
Owing to expiry-related reasons, if the Nifty sustains above 11,884, on intraday basis, then an initial target of 11,981 can be expected. A breach of 11,784 levels on the downside can trigger profit booking in the near-term
Despite weak formations on the daily charts, the larger trend would continue to be positive and post expiry session, if the market sustains above 11,800 levels then new life-time highs beyond 12,103 can be expected sooner rather than later
Traders to create fresh longs by making use of dips into the 11,750–11,700 zones.
The options data suggests a shift in the trading range for the Nifty to 11,750 to 11,950 levels.
On the monthly options front, maximum Put open interest was seen at 11,800 followed by 11,700 strike, while maximum Call open interest was seen at 12,000 followed by 11,800 strike.
Call writing was seen at 11,850 then 11,750 strike, while meaningful Put writing was seen at 11,800 then 11,850 strike.
The Bank Nifty continued its positive momentum for three consecutive sessions and extended gains towards 30,150 levels. However, it traded in a wider trading range between 29,750 and 30,150 for most of the day.
The index closed 0.38 percent higher at 29,987.50 and formed a Doji candle on the daily scale, as dips were being bought into while selling pressure was seen at higher levels.
"Now it needs to continue to hold above 29,700 to witness an upmove towards 30,250 then 30,500 levels, while on the downside, supports are seen at 29,750, then 29,500 levels
DISCLAIMER
The suggestions made herein are for information purposes and are not recommendations to any person to buy or sell any securities. The information is derived from various sources that are deemed to be reliable but its accuracy and completeness are not guaranteed. The company does not accept any liability for the use of this information. Readers of this information who buy or sell securities based on the information are solely responsible for their actions. And we won't be liable or responsible for any legal or financial losses made by anyone.