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The Nifty50 after sharp gap up opening witnessed sustained buying interest throughout the trading session to extend its gains above psychological 11,500-mark on Friday

ahead of Prime Minister's meeting with top government officials to review the current economic scenario.

The index held on to its crucial support placed at 11,380 levels and closed sharply higher, forming bullish candle on the daily candlestick charts and 'Hammer' pattern on the weekly charts.A Hammer which is a bullish reversal pattern is formed after a decline. A Hammer consists of no upper shadow, a small body, and long lower shadow.

The long lower shadow of the Hammer signifies that it tested its support where demand was located and then bounced back.The Nifty50 opened sharply higher at 11,443.50 and maintained 11,400 levels throughout the session. The index extended rally as the day progressed and hit an intraday high of 11,523.25.

It closed 145.30 points or 1.28 percent higher at 11,515.20 but on the weekly basis, it lost 0.6 percent on top of 0.8 percent loss in previous week.Technically speaking as multiple buy signals are visible on lower time frame charts post Friday’s price action the trajectory shall continue to remain positive for next couple of trading sessions provided Nifty50 sustains above 11,380 levels on closing basis.

In case Nifty50 closes below 11,380 levels then chances of new swing low beyond 11,250 shall remain strengthened, Mazhar said.

India VIX fell by 3.24 percent to 13.78. Decline in VIX could provide some stability in the market, experts said.

On option front, maximum Put open interest (OI) is at 11,400 followed by 11,000 strike while maximum Call OI is at 11,800 then 11,600 strikes. Put writing is at 11,500 followed by 11,400 whereas Call unwinding is at all immediate strike price.

Last modified on Friday, 14 September 2018

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