● From Price Action Perspective:
Post a positive opening closer to 22750, minor profit booking from a higher level was visible, led by selling pressure in Reliance and IT Stocks.
Bank Nifty witnessed a continuation of the positive momentum visible since the past week with strong momentum visible in ICICIBANK yesterday and HDFCBANK consolidating closer to its resistance zone at 200 DMA zone of 1560.
Sectoral indices such as Realty, Metal, Auto, Financial Services, Infra, and Banking are displaying superior relative strength where we expect momentum to continue while IT, Media, and FMCG are expected to continue their underperformance going forward.
● From the Global Market perspective:
Dollar Index, is currently stable around 104.15 and is a short-term positive.
US10 year yields too have been trading around elevated levels of 4.40% since the past few sessions.
Brent Crude Oil prices, currently trading closer to $91 a barrel, could be a real cause of worry from an Indian perspective.
US CPI data scheduled tonight will be extremely crucial as that would be a key determinant of the Fed Policy Action going forward.
A softer inflation would mean Fed could start cutting rates soon, while a hot inflation number above 3.4% would mean Fed deffering its Rate cut plan by a few more months until inflation is under an acceptable level.
● Key Nifty levels:
While Indices are in an overall uptrend, it’s important to be cognizant of the fact that Election dates are now approaching closer, and with Brent Crude oil prices, steadily inching up warrants some caution.
Going forward, hence one should keep trailing their long positions with key support levels in mind. Strong support lies around 22480-22500, which is the swing high of March 2024 & and until this zone holds, the upmove could extend upto 22830-22870 levels on the upside. Any sustainable move above the level of 22870 will lead to an extension of the rally towards 22980-23030 in the short term.
If in case index slips below 22480, it will lead to further selling pressure in the index upto the 22350-22280 level.
● OI data Interpretation
Nifty PCR is currently around 1.05 levels, implying strength in the indices.
Meaningful call writing is witnessed across 22700-22800 strikes, while Significant Put writing was witnessed in 22600-22500 strikes.
The overall range for the coming few sessions could be 22850 on the upside & 22500 on the downside.
● Key Bank Nifty Levels:
With HDFCBANK, ICICIBANK, and Indusindbk displaying volatility, the sentiments have been quite buoyant for the Banking Index, and texture has changed to buy on dips. Also, in the last 5 days, Index has witnessed the formation of Higher Top Higher Bottom pattern.
Till Index holds above its crucial supports placed at 48300-48400, which is Jan 2024 swing high, the current positive momentum could extend towards the zone of 49100-49250.
If the index slips below 48250, it will lead to further selling pressure in the index upto the 47950-47800 level.
From the Open Interest perspective,
With Banknifty PCR currently above 1.15 and significant call writing seen at 48800-49000 strikes and 48600 puts, it implies a range of 48400 and 49200 for the next few days.
● Sectors & stocks in Momentum:
From the broader market,
IciciBank, Apollo Hospital, Bajaj Finserv, BEL, AB Capital, Eicher Motors, Hind Copper, Nalco, Grasim, HAL, Icici Lombard, Policybzr, BEML, Castrol, MCX, Sail, Tata Power & Zomato look good based on technical parameters as well as on the Relative Strength chart.
● FII – DII Data Synopsis:
In Cash Market,
FIIs have been sellers to the tune of 593 cr while DIIs bought to the tune of 2257 Cr.
FIIs’ Long short ratio of index futures improved to 51% as on a net basis, they bought 27659 index futures.
On the stock futures front, FIIs have bought to the tune of 13637 contracts, while on the Options Front, FIIs bought 167901 call contracts and 162395 Put Option contracts.
