Domestic equity markets continue to move in a range near all-time highs. On Wednesday, S&P BSE Sensex dropped 392 from the intraday highs to end flat with negative bias. NSE Nifty 50 ended at 15,721. All sectoral indices on NSE closed with losses, except Nifty IT. The Bank Nifty index was down 0.68%. On Thursday morning, SGX Nifty was trading flat, hinting at range-bound movement for domestic equities. Cues from global peers were mixed. “After showing sharp declines from the all-time highs in the past, the Nifty witnessing a range bound action this time could indicate that the market is preparing for a sharp movement on either side. The overall chart pattern signals a higher possibility of an upside,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Global watch: On Wall Street, Dow Jones closed 0.61% higher while S&P 500 ended 0.13% in green. However, the tech-heavy NASDAQ index closed in the red. Among major Asian stock markets, only KOSDAQ was up with gains. Hang Seng, Shanghai Composite, KOSPI, Nikkei 225, and TOPIX were down with losses.
Technical take: Nifty has been moving range-bound for the last few days now. “A small negative candle was formed with a minor upper shadow. This pattern signals continuation of weak trend amidst a range bound action in the market,” Nagaraj Shetti said. He added that the action has not negated the recent uptrend in the market and such consolidation movements near all-time high could eventually result in an upside breakout of the hurdle.
Levels to watch out for: Major hurdle of 15,800-15,900 has not been crossed for multiple trading sessions now. “Technically, the market has formed a double top at 15835 levels and closed below the lowest of the previous day, which was at 15724. Based on that, Nifty would fall to 15650-15620 levels,” said Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities. He, however, believes the trend continues to remain positive and advises to buy the dip. “Keep a final stop loss at 15550 for the same. On the up-side, 15770 and 15840 would be major hurdles.”
FII and DII trades: On Wednesday, Foreign Institutional Investors (FII) were net sellers of domestic securities, pulling out Rs 1,646 crore. On the other hand, Domestic Institutional Investors (DII) were net buyers, pumping in Rs 1,520 crore.
Weekly expiry: Maximum Put OI for Nifty is seen at 15,500 ahead of the expiry session, followed by 15,600 strike. On the other hand, maximum Call OI is at 15,900 followed by 15,800 strike price. For Bank Nifty maximum Call OI was at 35,000 strike and Put OI was most at 34,000 strike.