Nifty and Sensex rose for the fourth day straight on Wednesday as bulls asserted control on Dalal Street and index heavyweights such as Reliance Industries surged. S&P BSE Sensex ended the day at 55,297, up 630 points or 1.15% while NSE Nifty 50 index added 180 points or 1.10% to end the day above 16,500. Entering the weekly futures & options expiry session, SGX Nifty was trading flat, suggesting a muted start for indices on Dalal Street. Global cues were mixed even though Wall Street indices closed in the green on Wednesday.
Global watch: The tech-heavy NASDAQ index gained 1.58% on Wednesday, followed by S&P 500 and the Dow Jones. Asian markets, however, traded mixed with Shanghai Composite, Hang Seng, Nikkei 225, and TOPIX in the red while KOSPI and KOSDAQ were higher.
What do the charts say: Although Nifty 50 closed with gains, a small body of negative candle was formed on the daily chart with gap up opening, which signals reluctance of the market to conquer further highs after the sharp positive opening, according to Nagaraj Shetti Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “This market action could possibly bring further consolidation/minor downward correction for a short term before moving up further,” he added.
Levels to watch out for: “The chart pattern suggests that if Nifty would sustain 16400 levels then any dip would be a buying opportunity as it would lead the index towards 16650-16700 levels,” said Om Mehra, Technical Associate, Choice Broking. Meanwhile, Nagaraj Shetti added that there is no firm evidence of any reversal pattern unfolding at the highs. “A sustainable move above 16550-16600 levels could pull Nifty towards another hurdle of 16800 levels in the short term. Any decline from here could find support around 16300-16250 levels in the near term,” he added.
FII and DII trades: Foreign Institutional Investors (FII) were net buyers for the third day straight on Dalal Street. FIIs pumped in Rs 1,780 crore into domestic stocks. However, domestic Institutional Investors (DII) were net sellers for the second day running, pulling out Rs 230 crore.
Call and Put OI: “Nifty PCR has moved up to 1.4 on the back of covering in calls and fresh writing at 16400 and 16500,” said Rahul Sharma, Director & Head – Research, JM Financial. “Significant SC was seen in Nifty (OI down by 12.7%) while Bank Nifty too witnessed closure of shorts (OI down by 6.1%),” he added. Om Mehra of Choice Broking highlighted that on the call side the highest OI was witnessed at 16600 followed by 16700 strike prices while on the put side, the highest OI was at 16400 strike price.