Bulls continue upward march, broader markets in jubilant mood; Nifty 16,800 PE option sees massive OI addition!

Market Update at 10:00 AM: It’s a marvellous Monday for the Indian equity benchmark indices as Sensex and Nifty logged fresh all-time high during the early morning session. Indian markets opened higher amid buoyant global cues and after opening in green, there seems to be no looking back for the bull as Nifty and Sensex have jumped 0.80 per cent and 0.76 per cent, respectively.   

Nifty is trading above the 16,800 mark while Sensex is above the 56,500 mark. The broader market indices are also seen in a jubilant mood as Nifty Midcap 100 and Smallcap 100 jumped over 1 per cent. Market breadth is extremely positive as the advances have outnumbered the declines by a wide margin.   

On the options’ front, massive open interest addition is seen in the 16,800 Put option as nearly 31.55 lakh shares have been added in the initial hour of the trade itself. However, the maximum concentration of open interest is seen at 16,700 Put option strike as the total open interest stands at 52.96 lakh shares. Option data also indicates that bulls are in the driver's seat.   

SGX Nifty is indicating that the Indian markets are likely to open with a gap on Monday as it trades higher by half a per cent and above the 16,800 mark.   

Nifty found its mojo back and logged a fresh all-time high on the last trading session of the previous week. It ended the week with gains of 1.55 per cent and above the 16,700 levels. It was heartening to see that finally, the broader market indices i.e. Midcap-100 and Smallcap-100 retrieved the momentum and gained 2.1 per cent & 1.9 per cent, respectively.  

During the last week, Nifty hit an all-time high level twice. It managed to close above its prior week high. Under any circumstances, this price action is very bullish. The weekly MACD histogram shows an improved momentum on the upside. Once again, last week's bearish shooting star failed to get the confirmation for its downside implications. Given that it has negated its bearish implication, we advise readers to be with a positive bias.   

Going ahead, on the upside, the level of 16,850-16,900 is likely to act as a resistance level. On the downside, the level of 16,500 is an immediate support level. So, as long as the index trades above the level of 16,500, adopt a buy-on-dips stance.