The Nifty50 opened higher and gradually extended gains to close near 15,800 on June 24, the day of expiry for June futures & options contracts.
The index formed a bullish candle and an Inside Bar pattern on the daily charts as it traded in the range of the previous session.
The rally was largely supported by IT, followed by select banking & financials, auto and metals stocks, though weakness in Reliance Industries, which held its 44th annual general meeting, limited the upside.
A sustainable upmove is possible only above the 15,900- mark, till then the consolidation is expected to continue, experts said.
India VIX fell by 1.71 percent from 15.36 to 15.09 levels but still in 14.50 to 15.50 levels range.
The Nifty50 opened gap up at 15,737.30 and gradually extended gains amid volatility to hit the day’s high of 15,821.40. The index settled at 15,790.50, up 103.50 points.
“It appears to be the day of consolidation on the bourses as the Nifty surprisingly remained steady, without any volatility on expiry session, within the trading range of a bearish candle registered in last Wednesday’s session which resulted in an Inside Bar kind of formation,” said Mazhar Mohammad, Chief Strategist–Technical Research & Trading Advisory at Chartviewindia.in.
However, “despite this positive move, advance-decline ratio clearly favoured bears, hinting at wide-spread profit-booking in broader markets,” he said.
About three shares declined for every two shares advancing on the NSE. The broader markets ended mixed as the Nifty midcap 100 index was down 0.28 percent and smallcap 100 index rose 0.04 percent.
Hence, “it remains critical for the Nifty50 to sustain above 15,673 levels to continue sideways consolidation with positive bias though strength in the index shall not be expected unless it closes above 15,862 levels, he said, adding the sustainable upmove is possible only if Nifty closes above 15,900 levels.
According to him, if the Nifty50 slips below 15,670 then bears can start dominating by eventually pushing the index towards lower end of the broader trading range present in the zone of 15,900 – 15,450 levels.
Therefore considering sideways nature, Mohammad advised traders to remain neutral on long side but intraday shorting opportunity arises below 15,670 for a modest target of 15,550 levels.
Since it is the beginning of new series, the options data is scattered at different strikes. Maximum Put open interest was seen at 15,500 followed by 15,000 strike, while maximum Call open interest was seen at 16,000 followed by 16,500 strike. Call writing was seen at 16,000 and 16,500 strike, while Put writing was seen at 15,000 then 15,500 strike.
The data indicates that the Nifty50 could see a wider trading range of 15,400 to 16,200, while an immediate range could be 15,600- 16,000 in the coming sessions.
The Bank Nifty opened positive at 34,687.70 and headed towards its previous day’s high of 34,935. Selective banking stocks kept the Bank Nifty in strength and the index closed with gains of 253 points at 34,827. It formed a bullish candle and an Inside Bar candle on the daily scale.
“The Bank Nifty has to hold above 34,750 to move up towards 35,000 and 35,250 levels, while on the downside, support is seen at 34,500 and 34,250 levels,” said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
On stocks front, he said bullish setup was seen in Infosys, TCS, Mindtree, Max Financial Services, Asian Paints, Maruti Suzuki, Bharat Electronics, ICICI Bank, Dabur, Bajaj Finserv, HCL Technologies, UltraTech Cement and Ramco Cement. Weakness was seen in Reliance Industries, Mahanagar Gas, Apollo Tyres, REC, Petronet LNG, HPCL, Exide Industries, IOC, Amara Raja Batteries and LIC Housing Finance.
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