Markets continue to trade in green; 15,200 PE option sees huge addition in open interest
Market update at 2:45 PM: After having witnessed a lacklustre movement in the afternoon session, Indian markets have started to pick up momentum aided by banking and financial stocks.
Barring Nifty FMCG and Nifty Metal, all other sectoral indices were trading in the green led by the Nifty PSU Bank and Nifty Media.
On the options’ front, the 15,200 Put option strike has seen addition of nearly 19.16 lakh shares and the maximum open interest concentration on the put side stands at 15,000 strike with total open interest of 57.34 lakhs, indicating that 15,000 is a major support and immediate support is at 15,200 for the index. Meanwhile on the Call option side, 15,300 Call option strike has seen addition of 16.72 lakh open interest.
Market update at 11:05 AM: Sensex after opening in green and marginally slipping into red is again trading in green, sitting on gains in excess of 200 points.
HDFC Twins and SBI put together are helping Sensex deliver an impressive performance when nearly 40 per cent of the Sensex stocks are trading in red.
BSE Midcap Index is up by 0.70 per cent while BSE Small Cap Index is up by 0.69 per cent on Monday, outperforming Sensex.
Natco Pharma is the top Mid cap gainer followed by Canara Bank and Adani Transmission.
Shemaroo entertainment is the top small cap gainer , locked in upper circuit, up by 20 per cent followed by JKEKT India which is up by more than 16 per cent and Astec Life Science which is up by more than 15 per cent.
Barring BSE Metal, BSE Consumer Durables and BSE Telecom , all the other sectoral indices are trading in green.
Market update at 10:10 AM: The Indian benchmark indices trimmed their early gains and were seen trading flat on Monday. The Nifty is up by 11 points and Sensex has added about 84 points. The advance-decline ratio is tilted in favour of advancers.
The majority of the sectoral indices were in green, led by the Nifty PSU Bank index, up by 0.88 per cent. On the other hand, Nifty Metal index witnessed a sharp fall of over 1.5 per cent amid Industrial metals price fell, after regulators in top consumer China warned domestic commodity companies to maintain “normal market orders” following a strong rally.
Among the stock-specific action, Oriental Hotels, Shemaroo Entertainment, Astec Lifesciences, Natco Pharma, and Birlasoft have hit a new 52-week high in today’s session.
The special relationship between the two M(s) i.e. Monday & markets continued for the third week in a row.
Usually, we have witnessed that on Monday, markets either open with a gap-up or a gap-down but fortunately for the bulls, Nifty opened with a gap-up on Monday (May 17) for the second consecutive week.
After a picture-perfect start to the week, there was no stopping for the bull. With this, Nifty reclaimed its important psychological level of 15,000 on Tuesday. However, just when everything looked hunky-dory, the global cues turned sour all of a sudden, and in the subsequent trading sessions, Nifty surrendered more than half of its gains and went on to test its important support level of 14,884.
So, out of the first four trading sessions, it was even-steven between the bulls and bears as two trading sessions were dominated by the bulls while the next two belonged to the bears. Now, all eyes were on the decider day of the week i.e., Friday. And, as always, markets surprised everyone as Nifty rallied 1.81 per cent and closed at a two-and-a-half-month high. So, the saying, “All’s well that ends well” turned true for the markets. Moreover, the market valuation of firms listed on BSE hit $3 trillion for the first time on Friday.
On the daily as well as the weekly chart, Nifty formed a strong bullish candle. On the weekly chart, Nifty has formed a high top & higher bottom for the last three weeks. Interestingly, on the other hand, volatility declined significantly in the last week as India VIX cooled off nearly 6 per cent to 19.08. It now trades close to its lowest level seen over the last many months.
Meanwhile, the leading indicator i.e. RSI on the daily and weekly chart crossed above the 60-level. The trend strength indicator i.e. the ADX declined, with the positive directional indicator (+DI) trading above the negative directional indicator (-DI). However, since the -DI has not gone below the 25-level, it would be interesting to see whether or not the index attracts some follow-through buying in the next trading session without violating Friday’s low and if it does witness follow-through buying, the negative directional indicator i.e. the -DI could slip below the 25-level, which would be positive for the bulls.
One interesting observation, which was witnessed during the week was that the +DI made a higher low during the correction that was witnessed on Wednesday & Thursday. Even during the same period, the -DI made a lower high. Furthermore, on the weekly scale, if one could plot the ADX indicator and observe it, it would sum up the entire story of the price action of Nifty, which was witnessed in the last couple of months at one glance. ADX consists of three lines ADX, the positive directional indicator, and the negative directional indicator. All the three lines never moved above the 25 levels, which clearly indicates an absence of a decisive trend.
Overall, now that Nifty has closed decisively above the mark of 15,000 on a weekly basis and an improving trend of moderation can be witnessed in the daily new COVID cases, it's likely to bolster risk-on sentiment. Considering this, the Indian benchmark indices could outperform their global peers in the near future. Having said that, two important factors should be keenly watched; the first is that Nifty should not breach 14,880 on the downside, and in addition to this, the banking & financial stocks should also maintain their prevailing momentum.