Technical Overview – Nifty 50
The Benchmark Index on 1st December opened with a gap of almost 60 points registered its lifetime high at 20,291.55 levels and closed the week with more than two percent gains. In the last 12 trading sessions, the Nifty has formed three unfilled continuation gaps which indicates a strong bullish trend.
Short Covering Fuels Market Rally in November Series, Bullish Momentum Likely to Continue. Nifty rose 6.77% during the November month expiry. Nifty futures rollover stood at 73.06%, which is significantly lower compared to last month’s expiry rollover of 83.39% and its three-month average of 77.41%.
Nifty will start the December series with an open interest of 1.07 crore shares compared to an OI of 1.16 crore shares at the beginning of the November series. Nifty saw significantly lower rollover with a higher cost of carry (+0.67%) and a fall in open interest, compared to its previous month, indicating a covering of short positions in the November series.
Technical Overview – Bank Nifty
It was a power pack day for the Banking index where prices opened above 44,500 levels and registered an intraday high at 44,951 levels and closed with a gain of more than 2% on the weekly time frame. The Index on the weekly chart has taken support near the lower band of the rising wedge pattern and moved higher post taking support near 21 EMA.
The Bank Nifty on the daily chart has witnessed an inverted head & shoulder pattern breakout and the index has closed above the neckline of the pattern. Presently the Index is trading comfortably above its short and medium-term averages on the daily time frame, which is a positive sign for the index. The Banking Index has formed a tall bullish candle on the monthly chart and has formed a bullish piercing candle stick pattern.
The immediate support for the Banking Index has shifted higher near 44,400 levels as prices have witnessed a range breakout and the immediate resistance is likely to be capped below 45,400 levels.
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