Looking at the secondary level points on the index, most of the popular momentum indicators are, so far, not in the overbought territory on the daily chart, says Hedged founder and CEO Rahul K Ghose
The Nifty has broken out of a very long upward trending channel and is on its way to the 19,400-19,500 level. Series-on-series, the Nifty closed with a gain of around 3.55 percent and the Bank Nifty ended in positive at 44,327, gaining 1.48 percent. Let’s look at some of the factors that will continue to help the index in its journey upward.
The highest Call writing is at the 19,500 strike and the highest Put writing is at 18,500 strike and then the 19,000 strike. Even though the 19,200 Puts started to be written on June 30, this is less significant and too soon to say that this can be any type of floor.
The data is important from the point of view that this signals support on the downside as this is also in and around the 18,600 level, which is also a very strong support for the Index merging with the 20-day exponential moving average (EMA).
The Nifty added 11 percent and began the June series with 1.3 crore shares in open interest. On the rollover front now, the benchmark saw a higher number of rollovers at 76.06 percent against its three-month average of 69.07 percent with a rollover cost of 100.35 points. Hence, with an addition in open interest and prices ending in the green, the indication is that of a long build-up in the Nifty
Looking at the secondary level points on the index, most of the popular momentum indicators are not yet in the overbought territory on the daily chart.
