Nifty continued its up-move and surpassed the 18800 mark at close

Nifty continued its up-move in the week gone by and surpassed the 18800 mark at the close. Nifty is just a kissing distance away from the previous high which was at 18887.60, but it witnessed some cool-off from the highs in Monday’s session.

Nifty has been trading within a rising channel and the supports remain intact in spite of some in-between intraday volatility. The Banking index has seen some selling pressure as the index breached the 20 DEMA during last week and entered a short-term corrective phase. The pullback move in the Bank Nifty index on Friday marked a high of around 61.8 percent retracement on the hourly charts and thus this level of 44080 become a crucial hurdle for the banking index. On the lower side, Thursday’s low of 43526 becomes crucial support as it is around its 40 DEMA. A move below this level in Bank Nifty could then result in some further selling pressure. However, the important supports on Nifty are still intact as the index is trading in a rising channel, and 18670 followed by 18570 as important supports for the Nifty index. In the index futures segment, we have not seen any significant positions but some longs were formed by FIIs. They have around 55 percent positions in the index futures segment on the long side. In the options segment, 18800 and 19000 call options have high open interest indicating resistance levels while on the other side, 18700 puts have dent open interest. Traders are advised to tighten their stop loss below the mentioned supports in the respective indices as below these, the index could witness some corrective phase. 

On the other hand, the Nifty Midcap index has continued its up-move and hit another record high. But the momentum readings on this index are in a highly overbought zone and the index is trading around its retracement resistance. Hence, traders are advised to wait for the readings to cool off in the near future which could provide a better risk-reward ratio for investments rather than chasing at current levels.