Indian stock market indices, Sensex and Nifty 50, are likely to open higher on Tuesday tracking gains in global peers
The trends on Gift Nifty also indicate a positive start for the Indian benchmark index. The Gift Nifty was trading around 25,030 level, a premium of nearly 37 points from the Nifty futures’ previous close.
On Monday, the domestic equity market indices ended higher amid buying in heavyweights.
The Sensex rose 375.61 points to close at 81,559.54, while the Nifty 50 settled 84.25 points, or 0.34%, higher at 24,936.40.
Nifty 50 formed a reasonable positive candle on the daily chart, after the formation of a long bear candle on Friday.
“Technically, this pattern indicates an emergence of buying interest after a small downward correction. The immediate support of 20-day EMA (Exponential Moving Average) has been regained at 24,900 after violating below it in the previous session,” said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
According to him, the short-term trend of Nifty 50 remains weak, but the market is showing signs of sustainable upside recovery after a small downward correction. He said Nifty 50 needs to cross above the hurdle of 25,150 levels to consider a possible trend change towards up.
Here’s what to expect from Nifty 50 and Bank Nifty today:
Analysing the Nifty Open Interest (OI) data, Mandar Bhojane, Technical analyst at Choice Broking said the highest OI on the call side was observed at the 25,200 and 25,300 strike prices, while on the put side, the highest OI was at the 24,500 strike price.
Nifty witnessed a reasonable upside bounce from the lows on September 9 and closed the day higher by 84 points.
“Technically, Nifty remains a sell on rise as long as it remains below 25,100. On the higher end, the 25,000 - 25,100 range may act as crucial near-term resistance, where sellers could re-enter. On the lower end, support is placed at 24,800 - 24,785, below which selling might increase,” said Rupak De, Senior Technical Analyst at LKP Securities.
Praveen Dwarakanath, Vice President of Hedged.in noted that Nifty 50 bounced from its weekly support at 24,770 levels today showing signs of recovery. However, Nifty was weaker compared to Bank Nifty throughout the day.
“On the weekly chart, the RSI negative divergence is still intact, suggesting Monday’s bounce can be a dead cat bounce. Option writer’s data for the present week’s expiry shows increased put writing, however, the September expiry shows a short covering of In the Money (ITM) puts and increased writing in ATM calls, indicating a possible bearishness to continue,” Dwarakanath said.
Meanwhile, according to Aditya Agarwal, Head of Derivatives and Technical at Sanctum Wealth, the short term outlook for markets remains weak and pullback towards 25,000 / 25,080 levels can be used to book profits in trading long positions and create fresh shorts.
“A close below 24,750 can put additional pressure on the index and can drag it towards 24,600 / 24,520 levels,” Agarwal said.
Amid the ongoing market situation, VLA Ambala, Co-Founder of Stock Market Today believes that the Nifty index could expect support levels around 24,970 and 24,720, whereas resistance could be between 25,050 and 25,180 in today’s session.
Bank Nifty index rallied 540.95 points, or 1.07%, to close at 51,117.80 on Monday and formed a Piercing Line candlestick pattern at a daily timeframe near its 20- and 50-day EMAs.
“On the higher side, Bank Nifty will find strong resistance around 51,200 / 51,500 levels and can see profit booking around those levels. Only a close above 51,800 will change short term outlook in the index and in that scenario, it can move towards 52,280 / 52,460 levels,” said Aditya Agarwal.
On the lower side, he believes, 50,400 - 50,100 will act as a strong support zone for the index.
“Bank Nifty bounced from its weekly support at 50,400 level today showing signs of recovery. On the daily chart, RSI is yet to show signs of momentum on the upside although a strong 1% move came today. As suggested by ADX in the last update on the weekly chart there was no clear direction, indicating a possible recovery from the fall seen today,” said Praveen Dwarakanath
Option writer's data for the present week's expiry saw short covering in ITM calls, and writing in OTM puts, however, in the September expiry short covering was seen in OTM calls as well, which looks like an exit in shorts due to today's recovery. No significant writing was seen in ITM puts, indicating no big bullishness in the Bank Nifty, he added.
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.
