Post an upmove in the last hour on Tuesday, the index started the session above its 20 DEMA hurdle. Thus, we witnessed buying interest in the index as well as the broader markets throughout the day and it ended above 18150 with gains of over half a percent.
Nifty Today:
It was a crucial trading session for the markets as the index has closed above its ’20 DEMA’ hurdle after a month and this changed the short term trend for the index to positive. Hence, we witnessed buying interest in the broader markets as well and most of the sectoral indices witnessed a positive momentum. If we look at the data, the recent data such as falling Dollar Index, appreciating Rupee, Global market momentum etc. have been in favor of a rally in equities, but the FIIs selling was creating pressure on the index and hence the upmove was restricted. However, finally FIIs have started unwinding their short positions and thus it’s a relief for our markets. The technical pattern indicates a breakout and hence the corrective phase seems to be over. The option writers have formed positions at 18100 and 18000 put options and thus, this would act as the immediate support zone now.
Nifty finally gave breakout and resumed its uptrend
Thus, the data and the chart structure both indicate an optimistic picture and hence, the index could continue to rally higher. Traders should use intraday declines as buying opportunities and trade with a positive bias. The immediate support for Nifty is placed in the range of 18100-18000 while the index could rally towards 18330 followed by 18450 in the near term.
Nifty & Bank Nifty Levels:
Nifty Levels | Bank Nifty Levels | |
Support 1 | 18100 | 42200 |
Support 2 | 18020 | 42070 |
Resistance 1 | 18220 | 42635 |
Resistance 2 | 18280 | 42800 |
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About the Author
Ruchit Jain is Lead Research Analyst at 5paisa. He has a vast experience of 14 years in this field and is proficient in Technical and Derivatives Research. He has completed his CMT (U.S.A.) and has done Masters in the field of Finance at Mumbai University.
Investment/Trading in securities Market is subject to market risk, past performance is not a guarantee of future performance. The risk of loss in trading and investment in Securities markets including Equites and Derivatives can be substantial.
I am Ruchit Jain, a seasoned professional with a robust background as a Lead Research Analyst at 5paisa, where I bring over 14 years of extensive experience in the field of financial markets. My expertise lies in Technical and Derivatives Research, and I hold a prestigious Chartered Market Technician (CMT) designation from the United States. Additionally, I have earned a Master's degree in Finance from Mumbai University, further solidifying my academic foundation in the subject.
Now, let's delve into the content you provided about the recent market movements and analysis. The article discusses key concepts related to technical analysis and market dynamics. Here's a breakdown:
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20 DEMA (Days Exponential Moving Average): The article frequently refers to the 20 DEMA, indicating a reliance on technical analysis. A moving average is a commonly used tool to smooth out price data to identify trends over a specific period. In this context, the 20 DEMA serves as a significant parameter for assessing the short-term trend of the market.
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Buying Interest and Positive Momentum: The narrative emphasizes the presence of buying interest in the market, leading to positive momentum. This suggests that market participants are actively purchasing securities, contributing to an upward movement in prices.
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FII (Foreign Institutional Investors) Activity: The article discusses the impact of FIIs on the market. Initially, FIIs selling created pressure on the index, restricting the upward movement. However, the subsequent unwinding of their short positions is viewed as a relief for the market, indicating a potential shift in sentiment.
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Technical Pattern and Breakout: The technical analysis indicates a breakout, suggesting a change in the market trend to positive. Breakouts are crucial moments in technical analysis, signaling potential shifts in market direction.
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Option Writers and Support Levels: The mention of option writers forming positions at specific put options (18100 and 18000) establishes key support levels. Option writing is a strategy used by investors to generate income, and these levels are crucial for assessing potential downside risks.
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Nifty and Bank Nifty Levels: The article provides support and resistance levels for both Nifty and Bank Nifty. These levels are essential for traders to set entry and exit points, and they serve as benchmarks for assessing the strength of the current trend.
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Global Market Factors: The article briefly touches on global market factors such as the falling Dollar Index, appreciating Rupee, and global market momentum. These external factors are considered alongside domestic market indicators to provide a comprehensive analysis.
In conclusion, the article blends technical analysis, market sentiment, and global factors to offer a holistic view of the current market conditions. Traders are advised to interpret this information as a guide for potential trading opportunities and risk management.
