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Tech view: Nifty forms ‘Rising Window’, likely to test 10,400 levels

NEW DELHI: The Nifty50 index witnessed a gap-up opening on F..

NEW DELHI: The Nifty50 index witnessed a gap-up opening on Friday, as market sentiment was boosted by Thursday’s exit polls results, which showed BJP retaining power in Gujarat and Himachal Pradesh. However, the session remained largely in a range.

After opening at 10,345.65, the index touched an intraday high and low of 10,373.10 and 10,319.65. Later, Nifty50 index settled 0.79 per cent, or 81.15 points, up at 10,333.25. During the process, the index formed a ‘Rising Window’ candlestick pattern on the daily chart.

Milan Vaishnav, Technical Analyst, Gemstone Equity Research and Advisory said, “Monday is most likely to see some more upmove happening. As we go ahead with the results of the Gujarat elections coming in, we might see increased volatility and the markets attempting to test the 10,400-mark. On the candles, after a long lower shadow that emerged on Thursday, today a Rising Window has occurred. This is usually a gap, which often results into continuation of the upmove. If nothing untoward happens on Monday in the Gujarat Elections outcome, we see the market attempting to inch higher.”

Mazhar Mohammad, Chief Strategist, Technical Research & Trading Advisory, said, “In the event of this rally sustaining beyond Monday then that will positively impact the trend, which may eventually extend up to 10,600 kind of levels. On the other hand, any fall below 10,140 in next couple of trading sessions shall signal intermediate top around Monday’s high.”

On the option front, maximum Put open interest stood at 10,000 followed by 10,200 strike while maximum Call open interest remained at 10,500 followed by 10,400 strike.

“We have seen fresh significant Put writing at 10,300 and 10,200 strike while, Call writing is intact at 10,450 and 10,500 strikes. Put writing at higher strike suggests shifting of the support while intact Call writing at 10,450 and 10,500 could restrict its upside momentum,” said Chandan Taparia, Derivatives and Technical Analyst at Motilal Oswal Financial Services.

Volatilty index or India VIX declined by 8.94 per cent to 14.90. VIX has fallen from the recent high of 17.39. According to Taparia, it needs to cool off below 13 zones for the index to make a move towards fresh lifetime highs.

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