The Nifty50 on April 4 reclaimed the crucial 18,000-mark for the first time since January 18, as bulls strongly held the fort for a second consecutive session of the April series. HDFC-HDFC Bank merger news and positive global cues helped the index gain more than 2 percent at the start of the week.
The index closed at much higher levels over the opening and hence formed a bullish candle on daily charts. The momentum is so strong that the index can continue its march towards 18,350, the next hurdle, in the coming sessions, but given the massive rally, a bit of consolidation can’t be ruled out before a fresh uptrend resumes, experts feel.
The consistent fall in volatility also aided the momentum and experts feel if the volatility remains around these levels or falls below it then that could be a big support for the market. India VIX was down by 2.86 percent to 17.91 on Monday.
The Nifty50 opened higher at 17,809 and remained strong throughout the session to hit a day’s high of 18,115. The index closed with 383 points or 2.17 percent gains at 18,053.40.
“Bulls thronged the street as Nifty50, aided by HDFC twins, signed off the session above the 18,000 mark. Technically speaking, sustaining above the day’s bullish gap zone of 17,791 – 17,703 levels, the trajectory of this market shall be higher with an initial target of 18,350 levels,” says Mazhar Mohammad, Founder & Chief Market Strategist at Chartviewindia.
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Mazhar further added that once, the bulls manage to conquer the interim top of 18,350 levels, then decks will be cleared for new lifetime highs.
However, as the HDFC twins alone contributed around 225 points out of 383 points in Monday’s session, any profit booking or pause in these stocks may temporarily halt the upward movement of the Nifty50, the market expert added.
However, Mazhar Mohammad advised that dips in the index should be considered as an opportunity to create fresh long positions for an initial target of 18,350 levels.
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After Monday’s rally, the trading range suggested by option data for coming sessions also climbed upwards to 17,800 to 18,350-18,500 levels, from 17,500 to 18,000 earlier.
On the option front, maximum Call open interest was seen at 18,000 strike, followed by 19,000 strike while maximum Put open interest was witnessed at 17,500 strike followed by 17,000 strike. Marginal Call writing was seen at 18,000 strike then 18,200 strike while Put writing was seen at 17,800 strike then 17,700 strike.
Bank Nifty also opened gap up at 37,825 and showed immense strength for most part of the session. Slight dip was seen in the early hours but it regained to higher levels with an intraday swing from 37,665 to 38,765 levels. Finally, the index closed with massive gains of 1,487 points at 38,635 and formed a strong bullish candle on the daily scale.
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“The index has been making higher highs from the last six sessions. Now it has to hold above 38,500 levels to march upwards to 39,000 and 39,500 levels, whereas support can be seen at 38,250 followed by 37,777 levels,” says Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
The rally was also seen in the broader market with the Nifty Midcap and Smallcap indices rising 1.6 percent each.
On the stocks front, positive setup was seen in HDFC Bank, Chambal Fertilizers, IRCTC, Adani Ports, SAIL, Vedanta, Indian Energy Exchange, REC, L&T Finance Holdings, Syngene International, Siemens, Tata Power, HUL, Hindustan Aeronautics, Marico, Bharat Electronics, IndusInd Bank, L&T, AU Small Finance Bank, Sun Pharma, NMDC, Tata Chemicals, Axis Bank and Bata India, says Chandan Taparia.
However, there was weakness in Cholamandalam Investment, Mphasis, and Titan Company, Taparia added.
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