Indian stock market: Market indices Nifty 50 and Sensex extended their winning streak to six consecutive sessions. The Nifty 50 closed the day up by 41 points, or 0.17%, at 24,811.50, with 27 stocks gaining. Meanwhile, the Sensex finished 148 points, or 0.18%, higher at 81,053.19.
“Nifty Index opened gap up and remained in the range of its initial hour’s tick. It witnessed range bound move in a narrow band throughout the day but mostly stayed above 24800 zones and closed with gains of around 40 points. It formed a small bodied bearish candle on daily frame but has been making higher highs - higher lows from the last five sessions. Now it has to continue to hold above 24750 zones for an up move towards 24950 then 25100 levels while support is seen at 24750 then 24650 zones,” said Chandan Taparia, Head – Equity Derivatives and Technicals, Broking and Distribution, MOFSL.
India VIX was down by 2.44% from 13.30 to 13.01 levels. Volatility has been cooling off from the last six sessions and comforting the bulls to scale higher gradually.
On option front, Maximum Call OI is at 25000 then 25500 strike while Maximum Put OI is at 24000 then 24500 strike. Call writing is seen at 24950 then 25000 strike while Put writing is seen at 24700 then 24500 strike. Option data suggests a broader trading range in between 24400 to 25200 zones while an immediate range between 24600 to 25000 levels.
On the Bank Nifty outlook, Taparia further added, “Bank Nifty Index opened on a positive note and gradually extended the momentum towards 51080 marks in the latter part of the day. It formed a small bullish candle on daily scale and ended with gains of around 300 points near 51000 zones. It remained consolidative in a narrow range of 200 points in between 50800 to 51000 zones as buying was seen in selective banking stocks and closed above its 50 DEMA. Now it has to continue to hold above 50750 zones for a bounce towards 51250 then 51500 levels while support is seen at 50750 then 50500 zones.”
Chandan Taparia has recommended three stocks to buy tomorrow, August 23. According to him, these stocks – Titan, Grasim, Tata Consumer Product – are technically placed to see a decent upmove.
Price has broken out on the upside from a 3 month long consolidation zone with very high buying volumes. The ADX indicator has turned up from the bottom and the Positive DI has crossed above the Negative DI indicating the up move has strength.
Price has bounced back up from after retesting its support zone and has headed up for the 5 trading days with higher than average buying volumes. The ADX indicator is in a strong uptrend indicating bullish trend continuation.
Price breached its inside bar pattern high and headed up indicating buyers are in control. The Accumulation/Distribution Indicator headed up which suggests investors are buying at current levels.
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