By Sameet Chavan
The Indian stock market experienced an extremely volatile weekly expiry session on Thursday, in which the benchmark index started the session on a bullish note. The index’s initial momentum move sold off aggressively, dragging it down to the day’s lows, but soon after it recovered from the lows and boosted overall sentiment again. With all the rollercoaster moves of the day, the NSE Nifty 50 finally concluded the day in green, with gains of almost one percent, a little above the 15550 level.
Technically, the market attracted the trading community with its volatility, and also, important sectors saw strong movements which added the icing on the cake. However, the inherent trend remains hesitant as the index hovers below the critical 15700 zone. As far as levels go, the 15300-15350 area should cushion any sort of near-term correction. Whereas on the contrary, until a breakthrough is not seen above the 15700 area, the difficult period is likely to persist in the market.
Broad-based buying was seen across all exchanges on the sector front, where the top earners driving positive sentiment came from the automotive space, followed by IT. In view of recent developments, traders are advised to continue to follow the stock-centric approach for better trading opportunities and to keep a close eye on global developments.
In the F&O space, we have seen a reduction in open interests in Nifty as well as BankNifty. A stronger hand continues with its relentless selling of stocks, but prefers to buy in the segment of indices and equity futures. This translated into a 24% increase in their Long Short Ratio index futures. Interestingly, Nifty futures are now trading at a premium and the PCR-OI has also moved closer to 1, which is a positive development. For the upcoming monthly series, 15,500 puts and 16,000 call strikes attract traders’ attention. Therefore, we believe that 15400 – 15500 will act as an area of immediate demand, while any lasting move on the closing base above 15700 will open the doors to the psychological mark of 16000.
(Sameet Chavan is Chief Technical and Derivatives Analyst at Angel One. Opinions expressed are those of the author. Please consult your financial advisor before investing.)