F&O Radar: Deploy Bull Call Spread in Nifty to make potential gains from bullish momentum
Nifty closed positively after two days of consolidation. In the last trading session, it consolidated in the first half; however, it witnessed a strong recovery in the second half, allowing it to close above the 26,000 level.
“Technically, the Index has been forming higher tops and bottoms and now on an immediate basis, 25,800 is the support whereas 26,200 is the immediate target which is the upper end of the rising channel,” said Jay Thakkar, Vice President & Head of Derivatives and Quant Research at ICICI Securities.
The momentum indicator MACD is well in the buy mode on the daily and weekly charts, however, it is still in the sell mode on the hourly charts which is a concern in the near term.
“From the derivatives point of view, the PCR is 1.31 which is well above 1, hence it is considered to be bullish. It is trading well above its max pain level of 25850 which is bullish, however, it is trading below 26,067 which is its modified max pain level, so it will gain further momentum once it surpasses 26,070 levels approximately,” Thakkar adds.
The index is trading well above its monthly VWAP level of 25,368 as well as above its 5 days VWAP of 25,756, hence 25,800 levels approximately may be a good support going forward.
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