Domestic equity markets started the week on the right footing with both Sensex and Nifty propelling higher aided by bulls. S&P BSE Sensex rose 760 points or 1.41% to settle at 54,521 while the NSE Nifty 50 index was up 229 points or 1.43% closing the day at 16,278. Indi VIX, the volatility gauge, continues to slip further down to sit just above 17 levels. Ahead of Tuesday’s trading session, SGX Nifty was down in the red, suggesting a weak opening for indices. Global cues were mixed after Wall Street equity indices closed with losses overnight.
Global watch: On Wall Street, S&P 500 fell 0.84% on Monday, followed by NASDAQ and the Dow Jones. Among Asian stock markets, Shanghai Composite, Hang Seng, and KOSPI were down in the red. Nikkei 225, TOPIX, and KOSDAQ traded in the green.
What do the charts say: The Nifty gained on Tuesday, forming a long bull candle on the daily chart with gap-up opening, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. “This pattern signals a fresh upside breakout in the market after a reasonable downward correction. The positive sequence of higher tops and bottoms is intact as per the daily chart and the recent swing low of 15858 levels of July 14 could now be considered as a new higher bottom of the sequence,” he added.
Levels to watch out for: “In the near term, we expect the Nifty to continue the up move towards 16520 followed by 16650 which are the 200 EMA and the 50% retracement of the corrective phase respectively,” said Ruchit Jain, Lead Research, 5paisa.com. He is advising traders to look to trade with a positive bias and hunt for buying opportunities from a near-term perspective. Meanwhile, Nagaraj Shetti said that the next upside levels to be watched are around 16500-16600 in the near term while he sees immediate support at 16200 levels.
FII and DII flows: Foreign Institutional Investors (FII) were net buyers of domestic stocks on Monday. FIIs pumped in Rs 156 crore into stocks. Domestic Institutional Investors (DII) were also net buyers, buying stocks worth Rs 844 crore.
Call and Put OI: “Nifty futures saw short covering while Bank Nifty saw long buildup,” said Rahul Sharma, Director & Head – Technical, at JM Financial. He added that Nifty PCROI jumped to its highest level since April 28. “Strong Put writing was seen at 16200 and 16100 strike. Call writers were seen adding at 16500 strike,” He added.