Nifty on the daily chart ended with positive gains making piercing pattern on the daily chart. Broader indices paired Monday’s losses as bulls defended the 8,490 level on the lower side.
Bullish candle is formed after a previous day low is being breached and bulls strength is being tested. Tuesday’s closing is above previous day 50 per cent candle which confirms the formation of piercing line pattern.
As per the derivatives data, short build up is seen in 8,600 – 8,500 PE along with positive change is open interest and negative movement in price. While on Calls front Long build up is seen in 8,400 and 8,500 call with positive change in OI and price as well indicating a confluence a multiple levels. Highest OI now stands at 8,600 calls while on Puts 8,400 is leading. This gives the broader range in coming trading sessions.
Technically, in terms, of sentiment we have seen range expansion as one of the course in which previous day’s highs and lows are being tested and a range which was previously prevailing is now expanded. A lot of volatility may be seen in this range with patience and strength both being tested.
We have seen a lot of activity in sectoral index with OMC seeing a bullish buying interest in late hours and most of them giving bullish break out on daily chart. IOC and HPCL may see continuous buying momentum in coming sessions. Renewed buying is seen in metals, Infra while PSU banks on the back of recent recapitalisation news is seeing a buying interest as well.
PSU banks, cement, Infra and metals may see bullish momentum while IT may see further weakness post dismal Q1 performance by leading bellwethers.
(The author is CEO at Epic Research)