Recommencing the spirits of Diwali, Nifty extended gains for the second day in a row to close 0.49 per cent higher at 11,844.10, decisively holding above the 11,800 mark. However, India VIX also seemed to continue with this spirit and ended higher by another 1.58 per cent to close at 16.68, while Options data suggests a shift in higher trading range in Nifty from 11,700 to 11,900 levels.
Preceding the expiry sentiment, Nifty portrays a much neutral-to-slightly-bullish stance with maximum intra-day open interest additions seen in strike prices of 11,800 Put and 11,850 Call each to the tune of 14.69 and 7.70 lakh shares respectively. On the higher side 12,000 still remains a stiff resistance for the current series while the shift in option pain zone higher towards 11,800 from 11,700 indicates contracting range for the upcoming expiry session. Hence we expect the index to remain range bound in the coming sessions within 11,950-11,700 and fresh leverage should only be considered on a sustained breach above the 12,000 mark.
Breakout above 1520 zone served as the confirmation of the rounding formation on the daily scale with a pattern target upto 1650. Stock gained strong positive momentum during the day and closed 4% higher at 1580, forming a long green candle with strong rollovers indicating further strength. This ongoing strong momentum would only fizzle away in case the stock slip below 1540 (closing basis) from here on & hence the level serves as a trading stop for fresh longs.
Stiff resistance was observed throughout the series around 600-605 zone. UPL
slipped towards its 200 EMA alongwith its daily RSI value falling below its previous swing lows. Fresh shorts are been observed as the stock broke its 10 and 20 DMAs in quick successions & also close below them. Expect the weakness to persist in the coming month as the ongoing momentum could see an initial swing towards 570 level. This confirmation has come after it disturbed strong support levels of 590 and closed below it forming a bearish red candle.
Disclaimer: Views expressed are personal. Author may have positions in one or more stocks mentioned above.