Indian stock market benchmark indices, Sensex and Nifty 50, are likely to open flat Tuesday following cautiousness in Asian markets.
The trends on Gift Nifty also indicate a flat start for the Indian benchmark index. The Gift Nifty was trading around 24,635 level, a premium of nearly 12 points from the Nifty futures’ previous close.
On Monday, the domestic equity frontline indices ended at their fresh closing highs.
The Sensex gained 145.52 points to close at 80,664.86, while the Nifty 50 settled 84.55 points, or 0.35%, higher at 24,586.70.
Nifty 50 formed a small candle on the daily chart with identical open and close.
“Technically, this pattern indicates a formation of doji type candle pattern. Normally such doji formations after a reasonable upmove and at hurdles are considered as an impending reversal signal from the highs post confirmation. But, having formed this pattern amidst a range movement, the significant negative anticipation could be less,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
He believes the near-term trend of Nifty remains positive and having sustained above the hurdle of 24,400 levels (1.618% Fibonacci extension), there is a higher possibility of further gradual upmove in Nifty towards 24,950 levels in the next one week.
Here’s what to expect from Nifty 50 and Bank Nifty today:
Analysing the Nifty Open Interest (OI) Data, Deven Mehata, Research Analyst at Choice Broking moted that on the call side, the highest OI was observed at 25,000 followed by 24,700 strike prices while on the put side, the highest OI is at 24,500 strike price.
Nifty 50 continued the upside momentum on July 15 and closed the day with a decent gain of 84 points.
“On the daily chart, a doji pattern has formed, indicating indecisiveness. A fall below 24,520 might trigger near-term panic in the market. A fall below 24,250 might take the index towards 24,200-24,180,” said Rupak De, Senior Technical Analyst, LKP Securities.
According to him, on the higher end, resistance is placed at 24,650, above which further upside looks possible.
According to Rahul Ghose, CEO of Hedged.in, the increased writing of the put OI at 24,600 & below levels, indicates that Nifty is likely to find support around this level for this weekly expiry.
“The PCR opened at 1.05 & traded flat for the day to close around 1.17, indicating the index has some room on the upside at the ATH, hence the pre-budget rally can’t be ruled out,” Ghose said.
VLA Ambala, Co-Founder of Stock Market Today noted Nifty’s price movement formed a Doji Star candlestick pattern on the daily timeframe, with RSI readings of 74 on the daily, 76 on the weekly, and 80 on the monthly frames suggesting its overbought conditions.
“Market sentiment has gained a boost due to the positive results across all sectors, including IT, consumer, and retail. The upcoming budget is a major event that is expected to add fresh triggers to the market. However, I would suggest caution amid this high index valuation,” Ambala said.
She expects Nifty to find support between 24,460 and 24,530, and face resistance in the range of 24,720 and 24,850 in today’s market session.
Bank Nifty ended 177.00 points, or 0.34%, higher at 52,455.90 on Monday, forming a bullish candlestick pattern with upper and lower shadows.
“The Bank Nifty looks poised to give a breakout from the recent consolidation. The index has been sustaining above the critical moving average. On the higher end, it might move up towards 53,000 once it sustains above 52,500. Significant put writing is visible at 52,500, which might provide strength to the Bank Nifty bulls,” De said.
On the other hand, he believes the failure to move above 52,500 in the initial hour might attract selling pressure.
“The increased writing of the put OI at 52,500 & below levels, indicates that Bank Nifty is likely to find support around these levels, for current weekly expiry. The max pain is also trading at 52,500. The Bank Nifty PCR opened at 0.77 & traded flat in the first half, later it jumped to test 1.19 in second half, indicating the index likely to retrace from the higher levels, in the weekly expiry today,” Ghose said.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
