By Sameet Chavan
Our markets started the session with, yet another upside gap post the mid-week holiday. In the initial trades, Nifty hastened towards 17400 and then slipped into a consolidation mode for the major part of session. Eventually, with traders opting to take some money off the table after two days’ of giant leap, Nifty ended the session convincingly above 17300 by trimming some portion of gains to 0.33%.
Globally things have improved drastically and hence we are being the stronger market, managed to give a sharp recovery from Monday’s low. Now although, we witnessed a small correction during the latter part of the session, we continue to remain sanguine and expect the market to attract buying interest at lower levels. Technically, prices have stayed beyond the key ’20-EMA’ on the daily time frame chart, indicating inherent strength. As far as levels are concerned, 17200 – 17000 to be considered as a sacrosanct zone and any decline in the vicinity of the same, should be utilized to go long. On the flipside, 17400 and then we can see Nifty extending the gains towards 17500 – 17650 levels in coming days. Traders are advised to keep focusing on individual themes because the MIDCAP index is displaying sturdiness and hence, can provide much better opportunities than some of the heavyweight spaces. We hope globally sentiments remain upbeat, which is likely to act as an impetus in our domestic market.
Recently, the banking index has precisely rebounded from the support zone around 89 EMA in the daily chart and the formation of strong bullish engulfing candle on Friday has been a positive development. We have been mentioning in our previous articles to maintain a positive bias and we still believe market may further rally, hence any intraday declines should be used as an opportunity to add fresh bullish bets. As far as levels are concerned, immediate support is at 39000 – 39200; whereas resistance is at 39600 – 39800 levels.
FIIs were net buyers in the cash market segment to the tune of Rs. 279 crores. Simultaneously, in Index futures, they sold worth Rs. 175 crores with an increase in open interest, indicating short addition. Looking at the overall F&O data, we have witnessed a building up of mixed positions on the weekly expiry. On the options front, the piling up of positions is visible in the 17300-17100 put strikes, indicating a shift in the support base for Nifty. While on the higher end, the maximum OI concentration is seen at 17500 call strike, which is likely to act as stiff resistance in the comparable period. Also, the ‘Long Short Ratio’ has improved slightly to 20% from 19%.
(Sameet Chavan is the Chief Analyst-Technical and Derivatives at Angel Broking. Views expressed are the author’s own.)