Nifty, Bank Nifty at fresh highs: What F&O cues, technical charts suggest?

Nifty and Nifty Bank hit fresh record highs on Tuesday, breaking above their recent consolidation zones. Futures and options cues are promising and technical charts suggest strength, said analysts who see scope for further upsides ahead. On Nifty, 24,000 level is likely in coming days; any fall on Nifty Bank should be bought into, said analysts. 

For the day, Nifty closed the day at 23,721.30, up 183.45 points or 0.78 per cent. It hit a record high of 23,754.15 during the session. Nifty Bank hit a record high of 52,746.50, before closing the session at 52,606, up 1.74 per cent. 

Technical cues

Nifty

On the daily charts, said Jatin Gedia of Sharekhan, Nifty saw follow-through buying. The consolidation of the last 10 trading sessions broke out on the upside and trending moves are likely to begin, he said while expecting the index to ride the upmove till there is weakness on the price front.

Hrishikesh Yedve, AVP at Asit C Mehta Investment Interrmediates said Nifty has broken out of the short-term consolidation range of 23,330–23,670 and has closed above it. As per this breakout, the rally could extend towards 24,000 level, he said. On the downside, the level of 23,670 will act as immediate support for the index, Yedve said. 

Nifty Bank

On Nifty Bank, Gedia of Sharekhan said the banking broke out of a three-day consolidation on the upside and started its next leg of the upmove towards 53,100. Daily and hourly momentum indicators have a positive crossover, which he said is a buy signal. The trailing stop loss for long positions should now be trailed to 51,750, he said.

Nifty Bank's support now stands at 52,000 and intraday dips should be viewed as a buying opportunity for targets of 53,000 and 53,500 levels, said Kunal Shah of LKP Securities. 

"Bank Nifty has crossed the short-term trend line resistance and sustained above 52,000 hurdle, indicating strength. Thus, as long as index holds above 52,000 levels, buy-on-dips strategy should be adopted. On the higher side, 53,000 will act as an immediate hurdle for the Bank Nifty,” Yedve said.

F&O cues 
Ashwin Ramani, Derivatives & Technical Analyst at SAMCO Securities said call writers (Bears) exiting at the 23,500 strike coupled with strong put writing at the 23,600 strike, led the steady intraday upmove on Nifty. 

The call writers, the Bears, (1.87 lakh contracts) stayed ahead of the put writers, the Bulls, (1.50 lakh contracts) marginally at the 23,700 strike and the option activity at this strike should provide cues about Nifty’s future direction, he said.

Ramani said all Nifty Bank strikes from 51,000 until 52,000 saw call writers (Bears) exiting and put writing, leading to the strong up move in Bank Nifty today. "The resistance for Bank Nifty now shifts to 53,000 & the option activity at this strike will provide cues about Bank Nifty’s future direction," it said.