By Sameet Chavan
The weakness in the global market led to a mild start in Indian equities, wherein the benchmark index opened tepid on the weekly expiry session on Thursday. Soon after, the bulls grabbed the opportunity and made a modest recovery in the index, but the correction got triggered again at the higher levels. Amidst the intense tug of war throughout the day, the bulls retaliated firmly and levitated the index to day’s high. The winning streak continued for the eighth consecutive session, wherein the Nifty concluded the day with a mere gain of 0.07 percent and settled a tad above 17950 level.
We allude to our previous commentary on not being complacent, as the index has seen a strong vertical movement in the past couple of weeks. However, the undertone is expected to remain upbeat till it sustains above the 17500 odd zone, but some tentativeness could be sensed as the index approached near the psychological mark of 18000. On the technical front, 18000-18150 is seen as the immediate hurdle for the bulls, while 17830-17765 is the immediate support. Looking at the technical setup, the market is likely to trade within the mentioned range until a decisive breakout is not seen on either side in the near period.
As far as Bank Nifty is concerned, it has now surpassed 39500 on a closing basis but we still do not want to get carried away. Because from here on the moves are not going to be as smooth as it has been over the past 3 weeks. We advise traders to stay light at higher levels and be prepared for volatile swings on both sides. As far as levels are concerned, 39800-40000 to be seen as immediate resistances, whereas on the flipside, 39300-39000 to be treated as intraday supports.
In F&O space, we observed the addition of fresh longs in Nifty and short covering was seen in Bank Nifty. Stronger hands turned net sellers not only in equities but also in derivatives segment. Going forward, many stock-specific adjustments are likely to continue and are likely to provide substantial trading opportunities. Hence, traders are advised to have a stock-centric approach and stay abreast with global and domestic developments on a regular basis
(Sameet Chavan is a Chief Analyst-Technical and Derivatives at Angel One. Views expressed are the author’s own. Please consult your financial advisor before investing.)