Nifty support now at 15900-16000, likely to remain upbeat in near-term; use minor dips to add long positions

Technically, the short-term structure seems bullish as the index authoritatively reclaimed the psychological mark.

Nifty support now at 15900-16000, likely to remain upbeat in near-term; use minor dips to add long positions
Looking at the F&O data, we have observed short covering in both the indices.

By Sameet Chavan

The positive global cues have led to a promising start to our market on the weekly expiry session. The initial gap up in the benchmark index was sustained throughout the day, suggesting an encouraging sign for the market participants. The rub-off effect of the positivity was visible across the board as the index decisively leaped over the psychological mark. By the end of the session, the Nifty maintained its gain and concluded the day on a positive note at the 16133 level, procuring near a percent.

Technically, the short-term structure seems bullish as the index authoritatively reclaimed the psychological mark. Also, the buying interest towards the fag end augurs well for the market participants, with the Nifty closing near the day’s high. From here on, the unfilled gap on the downside of the 16000-16045 odd level should act as the demand zone and cushion any minor blips. While on the flip side, the 16200 sub-level is likely to be seen as the immediate resistance, breaching which the next potential hurdle could be seen around the 16325-16400 zone.

Going forward, our market is likely to remain upbeat in the near term, wherein any minor dip could be seen as an opportunity for the bulls to add long positions. From here on, we may expect gradual moves in key indices, but individual pockets are now likely to outshine. Hence, it’s advisable to keep focusing on such potential movers, which are likely to provide better trading opportunities. Also, we would like to reiterate not being complacent with the gains and to stay abreast with daily developments across the globe.

FIIs were net sellers in the cash market segment to the tune of Rs. 925 crores. Simultaneously, in Index futures, they bought worth Rs. 1263 crores with decrease in open interest, indicating short covering. Looking at the F&O data, we have observed short covering in both the indices. Since the last three sessions stronger hands had been covering their bearish bets in index futures and stock futures segments. On the options front, we have observed piling up of positions in 15900-16100 put strikes, which clearly hints the immediate support has now shifted higher to 15900-16000 zone. On the flip side, a considerable OI concentration is visible at 16200 call strike. Global set-up suggests positive opening and any sustainable close beyond 16200 shall boost the overall sentiment of market participants.

(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.)

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