By Sameet Chavan
The Indian equity market started the session on a sluggish note amid the weakness in the global bourses post the Fed policy outcome, wherein the benchmark index witnessed a gap-down opening. Though the dip augured well for the bulls as they retaliated as soon as the market opened and made a modest recovery to pare down the initial loss. However, the hustle continued for the entire session and post an intense tug of war between bulls and bears, the Nifty managed to settle well above the 18000 mark with a mere cut of 0.17 percent.
On the technical aspect, the index managed to sustain above the sacrosanct support of 18000, implying the bulls’ resilience to safeguard the zone. The undertone is likely to remain upbeat, and as far as levels are concerned, 18000-17900 is expected to cushion any fall and thus could be seen as a crucial juncture to add long bets for intraday dips. On the flip side, the 18100-18200 zone still holds the sturdy resistance for the index, and any persistent breakthrough could only open the gates for further upside.
FIIs were net buyers in the cash market segment to the tune of Rs 678 crores. Simultaneously, in Index futures, they sold worth Rs 1008 crores with an increase in open interest, indicating short addition. Looking at the overall F&O data, we have witnessed a mixed trade in both indices. On the options front, the highest concentration of OI is visible in the 18000 put strike, indicating it to be a strong support zone. While on the higher end, piling up of positions could be seen from 18100-18300 call strikes, suggesting a series of resistances for the index. Also, the stronger hands have slightly contracted their ‘Long Short Ratio’ to 59% from 65%. The index seemed to be in a slender range, and any breakthrough from the mentioned levels could only dictate the near-term trend.
We remain sanguine with the bullish view, where any dip towards the mentioned support could be utilized to add long bets. Also, it is advisable to stay abreast with the upcoming domestic key event of MPC outcome that could trigger some volatility in the comparable period. Meanwhile, we reiterate to keep a close tab on the mentioned levels and continue with a stock-centric approach for better trading opportunities.
(Sameet Chavan is the Chief Analyst-Technical and Derivatives at Angel Broking. Views expressed are the author’s own. Please consult your investment advisor before investing.)