Technical View | Uptrend may turn strong if Nifty delivers close above 19,850

All eyes on 19,850, crucial resistance for Nifty

The Nifty50 continued its northward journey for the second consecutive session and formed a bullish candlestick pattern with a long upper shadow and minor lower shadow on the daily charts on November 16, the weekly F&O expiry day.

The Nifty50 opened flat at 19,675 and gained strength towards the end of the initial hour of trade. As the day progressed, the index extended its upward journey and hit a day's high of 19,875 in the last hour of trade, but there was some profit-taking at higher levels in late trade and as a result the index could not sustain above 19,850, the crucial resistance area as well as swing high of October month.

Hence, unless and until the index gives strong closing above 19,850, the volatility in the trade may continue and a further uptrend towards the 20,000 mark is unlikely, while the support remained at 19,600-19,500 levels, experts said.

The Nifty50 settled at 19,765, the highest closing level since October 17, rising 90 points and sustained above the downward-sloping resistance trendline.

"To breakout on the upside, the index must deliver a resilient closing over 19,850 to mitigate any volatile scenario. When that occurs, the trend is foreseeable to hit a new historic peak," Avdhut Bagkar, Derivatives & Technical Analyst at StoxBox said.

As of now, he feels 19,500 will operate as an immediate support, and until this mark is shielded, the trend shall witness a bullish bias. "The trend to remain upward until medium-term support of 19,300 is held high."

On the weekly options front, the maximum Call open interest was visible at 19,800 strike followed by 19,900 & 20,000 strikes with meaningful Call writing at 19,800, 19,900 and 20,100 strikes while on the Put front, the maximum open interest was at 19,700 strike followed by 19,600 strike and 19,800 strike with writing at 19,700 strike and then at 19,800 strike.

The above options data suggested that 19,800-20,000 will act as a resistance area for the Nifty50, with immediate support at 19,700-19,600 levels.

Bank Nifty

The Bank Nifty opened moderately higher and jumped up to 44,421 amid volatility in the last hour of trade, but could not sustain those gains in late trade and finally settled with 40 points loss at 44,162. The index has formed a bearish candlestick pattern on the daily scale making lower high lower low formation.

"The breach below Wednesday's low (44,064) signals a potential profit-booking downward movement towards 43,900 and 43,680. The overall trend appears to be sideways, and it is anticipated that the Bank Nifty will trade within the broader range of 43,250 to 44,500," Riyank Arora, technical analyst at Mehta Equities said.

On the 15-minute charts, the Bank Nifty has formed a Double Top and seems poised to decline towards the 43,900 level, he feels. He recommends investors follow a buy-on-dips strategy.

The Nifty Midcap 100 and Smallcap 100 indices remained in positive terrain, rising 0.8 percent and 0.6 percent, respectively.

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