The monthly options data indicates that the 23,800-24,000 zone is likely to be the next hurdle for the Nifty 50, with crucial support at 23,500.
The Nifty 50 had a sigh of relief on December 23, making a strong start to the week, led by short-covering and some value buying after falling nearly 5 percent the previous week. The index snapped its five-day losing streak and bounced back to close above the 200-day Exponential Moving Average (EMA) at 23,700, with a sharp fall in the India VIX. If the index manages to sustain above this level, the 23,850-24,000 zone will be crucial to watch in the upcoming session. However, in case of a decline, 23,550 is likely to act as support, experts said.
The Nifty 50 opened above the 200-day EMA and remained in positive territory throughout the session. It finished at 23,753, up 166 points, and formed an Inside Body and Doji candlestick pattern on the daily charts, indicating indecision among buyers and sellers.
Shrikant Chouhan, Head of Equity Research at Kotak Securities, believes that non-directional activity is likely to continue in the near future; hence, level-based trading would be the ideal strategy for day traders.
For traders now, 23,650 and 23,550 will act as key support zones, while the 200-day SMA at 23,850 and the 24,000 level could serve as key resistance areas for the bulls, he added.
As per the derivative data, the 25,000 strike has the maximum Call open interest, followed by the 24,000 and 24,500 strikes, with maximum Call writing at the 23,800 strike, and then at the 24,000 and 25,000 strikes. On the Put side, the maximum open interest was seen at the 23,500 strike, followed by the 23,000 and 23,700 strikes, with maximum writing at the 23,500 strike, and then at the 23,700 and 23,800 strikes.
The monthly options data indicates that the 23,800-24,000 zone is likely to be the next hurdle for the Nifty 50, with crucial support at 23,500.
Bank Nifty
The Bank Nifty rallied by 558 points (1.1 percent) to 51,318 and formed a bullish candlestick pattern resembling a Bullish Harami on the daily timeframe (though not a classical one). The 51,650 level (100-day EMA) is the next hurdle for the index, followed by 52,100 as a crucial resistance, while support is placed at 51,000.
“Now, as long as the banking index holds below the 51,500 zone, some weakness could be seen toward 51,000, followed by 50,600 levels. On the upside, the hurdle is seen at 51,500, then 51,650 levels,” said Chandan Taparia, Senior Vice President and Head of Technical Research and Derivatives at Motilal Oswal Financial Services.
Meanwhile, the India VIX, the volatility index, fell sharply by 10.3 percent to 13.52 after the Federal Reserve event, providing comfort to the bulls.
Disclaimer: Moneywealth research provides stock market news for informational purposes only and should not be construed as investment advice. Readers are encouraged to consult with a qualified financial advisor before making any investment decisions.
Moneywealth research
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