Sensex rallies 700 points, Nifty reclaims 14,800 mark; broad put addition in Nifty from 14,700-14,800

Update:Indian markets have gone from strength to strength and were trading near the high of the day. Nifty was trading above the 14,800 mark while Sensex was trading above the 49,600 mark, up by 700 points.   

Among the sectoral indices, barring Nifty Metal and Nifty Pharma, all other indices were trading in the green with Nifty Auto, Nifty Financial Services, Nifty PSU Bank, and Nifty Bank trading above 2 per cent, each.   

On the options' front, broad put addition has been witnessed in the range of 14,700-14,800. The 14,700 put options have added nearly 37 lakh shares in the open interest in today’s session itself, while the 14,800 put option has seen the addition of 26.55 lakh shares in the open interest. On the call side, 14,900 and 15,000 call option has seen the addition of open interest of 6.94 and 8.9 lakh shares in today’s session. The 15,000 call option is where the maximum open interest is seen in April series. Meanwhile, PCR across all expiries stands at 1.60

The Indian benchmark indices continued to take the positive baton from the last trading session and extended its gains with Nifty trading close to 14,750 mark, up by 0.63 per cent while Sensex gained 0.68 per cent i.e. around the 49,300 mark.   

Among sectoral indices, the majority of the sectoral indices were trading in green with Nifty Auto, Nifty PSU Banks, and Nifty Bank being the top gainers. On the other hand, Nifty Pharma and Nifty Metal saw profit booking.   

All the constituents of Nifty Auto and Nifty PSU Bank were trading in green. TVS Motor Company saw a long build-up as the stock surged nearly 14 per cent with an open interest addition of more than 20 per cent. The company reported its earnings where it recorded the highest-ever profit in a quarter. 

The company's revenue from operations grew by 53 per cent at Rs 5,322 crore for the quarter under review against Rs 3,481 crore reported in the fourth quarter of 2019-20. During Q4 2020-21, the two-wheeler sales in the domestic market have grown by 41 per cent while international markets by 74 per cent, ahead of industry growth of 24 per cent and 33 per cent, respectively. In the month of March 2021, the company for the first time crossed the 1 lakh units' milestone for two-wheelers in international business.  

Nifty posted robust gains for the second straight day in a row on Tuesday and reclaimed the 14,650 mark. It was a perfect trend day for the index as the open and close were near the opposite extremes. 

Tuesday’s session started on a flat note and thereafter, moved higher. As the day progressed, the index added to its gains and finally settled near the day’s high. The price action of the day formed a sizeable bullish candle and moreover, Nifty has been forming higher highs & higher lows since the last two sessions. In addition to this, Nifty has finally reclaimed its 20-DMA after April 7 and recorded its highest closing since April 9.  

One interesting observation is that Nifty corrected about 5.5 per cent in eight trading sessions from a high of 14,984 to a low of 14,151. It has retraced 61.8 per cent of its downfall in three trading sessions, which indicates a faster retracement, and this bodes well for the bulls. Going forward, if the index manages to move decisively above the recent swing high of 14,697.70, it's likely to extend its upmove towards 50-DMA, which stands at 14,803.

The RSI bounced above the prior swing high. It has registered a trendline resistance or a symmetrical triangle-like breakout. Furthermore, the MACD is at the cusp of generating a bullish crossover. The +DI is seen trending higher while -DI is trending downwards, which again indicates that the bulls are trying to regain their lost strength.  

Overall, things seem to be improving from the bull’s perspective; however, what is important to look at, is that the index is still trading in the broad range to decisively close above this to get its momentum back. On the downside, 14,550 is likely to act as immediate support while on the upside, 14,700 may act as a resistance level.