Sensex and Nifty begin lower; later become volatile
Despite experiencing significant sell-offs on Friday and Monday, the Indian stock market ended Tuesday on a positive note. While the BSE Sensex soared 257 points and closed at 59,031 mark, the Nifty 50 index finished 86 points higher at 17,577. Nifty Bank index reached a final high of 38,697 levels, up 399 points. Metals, consumer durables, and auto indices all saw the biggest gains among sectors, while the IT index led the losers. Small- and mid-cap indexes both increased more than the Nifty 50 index, by 0.78 and 1.03 percent, respectively.
Stock market experts claim that after the daily chart opened lower, a long positive candle formed. Technically, this pattern shows that a bullish Piercing Line type candle pattern has formed (not a classical one). Such bullish piercing line patterns typically signal an upside reversal of a short-term downward trend after a reasonable decline. This highlights the power of a pullback rally following a sharp weakness. Therefore, a short-term upside bounce is possible.
“The respectable pullback rally since Tuesday’s lows may give bulls encouragement to make a comeback. A sustained upward movement from this point and a move above 17,800 levels could open the door to additional short-term gains. Bears are likely to resurface if the highs cannot be sustained. 17,500 levels are the current NSE Nifty support levels “the technical research analyst at HDFC Securities, Nagaraj Shetti, said
Rajesh Palviya, VP of Technical and Derivative Research at Axis Securities, discussed the technical outlook for Nifty Bank “According to the chart pattern, if Bank Nifty crosses and maintains above the 38,900 level, buying would occur, driving the index up to the 39,200–39,400 level. The index would experience selling if it fell below the 38,500 level, which would cause it to move toward the 38,200 to 38,000 mark.”
Rajesh Palviya of Axis Securities continued by stating that the Nifty Bank index had formed a “bullish candle” on the daily chart and had closed above its previous session’s high, signifying an impending positive trend. On the daily chart, the index is displaying a “Higher Top and Higher Bottom” formation, which denotes a recent “uptrend.”
Call/Put Nifty Ratio
Shilpa Rout, Derivatives Lead Analyst at Prabhudas Lilladher, commented on the Nifty Call Put data, saying, “Market snaps the losing streak on the third day and ended up making some solid close for the BULLs. The NIFTY option chain indicates that 17500PE will have a maximum exposure of more than 1.5 lakh contracts for the monthly expiry, and 17400PE will be the most active strike with more than 50,000 new contracts.
Over 2 lakh contracts total, with CE OI unwinding seen at immediate strikes, with CE writers active at 18000CE. According to Shilpa Rout of Prabhudas Lilladher, the PCR OI at the 17500 strike is almost 2 and the 17600 strike is just below 1, and if both hold and increase, expiration could occur on the higher side once more.
BankNifty Call Put ratio
Banknifty Put Option chain shows that PE writers are active at the strikes of 38000PE and 38500PE, with more than a lakh contracts total for each, and CE writers are adding their positions at the strikes of 39500/40000, with total contracts totaling a lakh for each, which suggests a range between 38000 and 40000 until the expiry,” said Shilpa Rout.
Mehul Kothari, AVP — Technical Research at Anand Rathi, Vaishali Parekh, Vice President — Technical Research at Prabhudas Lilladher, and Rajesh Palviya of Axis Securities unveiled intraday stocks for today and recommended 6 stocks to buy.
Disclaimer: Estrade Herald does not endorse the opinions or suggestions expressed above by specific analysts or brokerage firms.