Mkts rebound sharply after early weakness

Indices recover strongly from opening decline, technical charts signal upside momentum with firm support levels

Motilal Oswal Wealth Management Mumbai

Nifty index opened negative but picked up strength right from the start of the session and escalated higher throughout. It witnessed volatile cues within a range in the first half and was followed by the index crossing 23150 zones. It closed near its higher band with gains of around 160 points with a smart comeback of the bulls from the lower levels. It formed a bullish candle on the daily frame and has started to make higher highs from the last two sessions. Now it has to hold above 23000 zones for an up move towards 23450 then 23600 zones while supports have shifted higher to 23000 then 22850 zones.

On option front, Maximum Call OI is at 24000 then 23500 strike while Maximum Put OI is at 22500 then 23000 strike. Call writing is seen at 24000 then 23000 strike while Put writing is seen at 23000 then 22500 strike. Option data suggests a broader trading range in between 22600 to 23600 zones while an immediate range between 22900 to 23400 levels.

S&P BSE Sensex index opened with a gap down of over 350 points, however bulls asserted their presence right from the initial tick. Every minor dip was met with stronger buying interest leading to consistent follow up buying throughout the session. On the daily chart it formed a bullish candle with a slight lower wick indicating buying support at lower levels. Now it has to hold above 74300 for an up move towards 75000 and 75300 zones while support can be seen towards 74000 and 73800 zones.

Bank Nifty index opened gap down and drifted lower below 52000 zones in the initial hour of the session. Thereafter it traded in a narrow range of around 200 points for most part of the day. Strong buying interest emerged in the latter part of the session which lifted the index towards 52750 zones. It managed to hold its gains and ended the session on a positive note. It formed a bullish bodied candle on the daily scale with a lower wick indicating buying interest visible at lower zones. Now it has to hold above 52500 zones for a bounce towards 53000 then 53250 levels while a hold below the same could lead to weakness towards 52250 then 52000 zones. Nifty future closed positive with gains of 0.47% at 23165 levels. Positive setup seen in Concor, Mphasis, Wipro, Vendata, Phoenix, CAMS, Fortis, HCL Tech, Supreme Ind, Hindalco, TCS, Polycab and OFSS while weakness seen in Jubilant Foodworks, Bank of India, Biocon, Dr Reddy’s, PG Electroplast, Voltas and SRF. 

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Data source: Capitaline