Markets hit fresh all-time high; Sensex above 53,200 mark, Nifty 15,900 PE option sees aggressive addition in OI

Karan Dsij
/ Categories: Trending
Markets hit fresh all-time high; Sensex above 53,200 mark, Nifty 15,900 PE option sees aggressive addition in OI

Market Update at 11:30 AM: Thursday is turning out to be a marvellous trading session for the bulls as the key benchmark indices have logged a fresh all-time high. Nifty and Sensex are trading up by nearly half a per cent with Sensex touching the landmark level of 53,200 mark.   

Among the sectoral indices, Nifty IT, Nifty Financial Services & Nifty Bank emerged as the top gainers while on the flip side, Nifty Auto, Nifty Media & Nifty Energy were the top losers.   

On the options' front, there is an interesting activity which will comfort the bulls. The 15,900 Put option has seen maximum open interest (OI) addition in today’s session. The 15,900 Put option has added more than 66 lakh shares in the open interest while 15,800 Put witnessed more than 56 lakh shares in the OI in today’s session.  

 

Owing to subdued global cues, the Indian markets opened the session on a slippery note and soon after the opening, it took a dip. However, later, Nifty recovered from the lower levels, and it managed to close above the 15,850 mark i.e. up by 0.26 per cent.  

Besides, the biggest headline of the day wasn’t that the market closed in the green for the third consecutive day; instead, it was all about Zomato! The much-hyped IPO of Zomato was fully subscribed on the first day with the retail portion oversubscribed nearly 2.7 times.   

Meanwhile, the price action of the day formed a small bullish candle on the daily chart as its closing was higher than the opening level.   

Nifty closed above the previous day's high. However, it faced resistance around the upward trendline, which is drawn from the low of April 22, the index is below the trendline. The index is nearly half a per cent away from its all-time high and it has been stuck in a range of 15,635-15,915 for the past 16 trading sessions. This narrow range along with low volatility is an indication of a storm brewing on the sidelines. As we do not know the bias of the breakout, we better apply better risk management in place. During the ongoing consolidation, Nifty has been hovering around just half a per cent distance from its important moving average i.e. the 20-DMA. On Wednesday also, it took support around the 20-DMA and moved higher.   

For the first time after November 2020, Bollinger bands contracted for a much longer period. The distance between the price and the 50-DMA is declining. There are four distribution days currently. As Nifty already spent a lot of time at its lifetime high, it is approaching the maturity of a consolidation or a shallow price action. There are two ways to understand the current price action. The prolonged consolidation signifies a strong base at the 15,635 level. Whenever the price reaches near this support level, it forms a lower shadow, which is then followed by a sharp bounce-back.  


Meanwhile, the lack of faster retracement during the decline also signifies that the bulls are not ready to give up and the bears are unable to take a commanding position. Nifty has not even retraced 23.6 per cent of the prior uptrend from its April lows. The medium-term trend indicator i.e. the 50-DMA is still trending up.  

A decisive close above 15,900 would open the gates for a sharper move where Nifty is likely to test the level of 16,223. Meanwhile on the downside, immediate support is seen around the 20-DMA while the next major support is seen around 15,450 level.

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