Nifty near days high; 16,500 CE option witnesses decent unwinding!

Market Update at 2:00 PM: Nifty is trading near the day’s high and has also, managed to cross its prior day high. HDFC Bank and Bajaj twins are the top three major contributors to Nifty’s kitty as they have combinedly contributed 67 points.   

The broader market indices have also gone from strength to strength and were seen trading with gains of over 1 per cent.    

Among the sectoral indices, barring Nifty IT & Nifty FMCG, all other sectoral indices were trading in green. Nifty Metal, Nifty PSU Bank, and Nifty Bank were the top three gainers. Nifty Metal has gained more than 2.5 per cent while Nifty PSU Bank and Nifty Bank added 1.57 per cent each.   

On the options’ front, Nifty 16,500 Put option has seen a huge addition of 31 lakh shares in the open interest in today’s session itself while 16,500 Call Option witnessed unwinding of 9 lakh shares.

Market Update at 10:20 AM: Indian markets are off the opening highs but are still trading in a green territory with Nifty and Sensex adding 0.27 per cent and 0.24 per cent, respectively.   

The broader markets have regained their lost sheen as they are seen outperforming with Nifty Midcap and Smallcap inching higher by 0.56 per cent & 0.52 per cent, respectively.   

Among sectoral indices, majority of the sectoral indices were trading in green with Nifty Metal and Nifty Energy being the top gainers. Interestingly, Bank Nifty is seen trading near the day’s high and has gained more than half a per cent. It has recovered more than 250 points from the day's low.   

SGX Nifty was trading higher by half a per cent at 16,587 levels amid positive global cues as in the overnight trade, US stocks closed on a firm note, led by technology stocks.   

Owing to buoyant cues from the global markets, Nifty kicked off the week on a strong footing. However, the gap-up opening turned out to be a formality as soon after opening, the index began paring opening gains. At one point in time, the index slipped below the 16,400 mark. However, it witnessed a smart rebound from the lower levels and ended the day with modest gains of 0.28 per cent but below the 16,500 mark.   

The sell-off in the broader markets exaggerated on Monday as Nifty Midcap 100 and Smallcap 100 plunged 0.86 per cent and 1.85 per cent, respectively. As a result, the market breadth was weak. Moreover, Midcap 100 and Smallcap 100 index have slipped below their prior swing low. Also, Smallcap 100 has surpassed its prior major fall, which was witnessed in the month of March.   

Interestingly, the slope of moving average (50-DMA) of both Nifty Midcap 100 and Smallcap 100 has started to turn downwards after a long period of time, which is an ominous sign. Furthermore, the 14-period RSI of Nifty Smallcap index is hovering around the oversold territory.   

In the near term, we expect Nifty to move in the range of 16,300-16,700. Watch out for these levels and position yourself accordingly.