Markets in green; Reliance finds its mojo back, witnesses long build-up

Market update at 2:50 PM: The Indian markets continue to trade higher with Nifty & Sensex trading up by 0.67 and 0.62 per cent, respectively.  

The blue-eyed stock of Dalal Street i.e., Reliance Industries helped the market to maintain its gains. It has contributed about 94 points to Nifty gains and is currently trading near the level that was seen in the latter part of March 2021. The stock has also witnessed an addition of 9.12 per cent in the open interest.      

A long built-up is seen in Canara Bank, Trent, Shriram Transport Finance, HDFC AMC, and LIC Housing Finance. On the other hand, UBL, TVS Motor, Sun Pharma are some of the notable names that have seen a short built-up.   

Market update at 9:42 AM: Indian markets started June series on a strong footing amid favourable global cues. Nifty surpassed its previous all-time high level of 15,431, which was registered in February this year. 

While writing this, Nifty was up by 108 points and was trading close to 15,550 mark while Sensex was up by more than 300 points and was within a striking distance of the 51,500 mark.   

Interestingly, the volatility gauge i.e. India VIX has plummeted more than 10 per cent and is trading below the mark of 18.   

Among the sectoral indices, barring Nifty Pharma, all other indices are trading in the green, led by Nifty Metal and Nifty Media.   

Long built-up is seen in Amara Raja Batteries, Canara Bank, Dr Lal PathLabs, Eicher Motors, and Jindal Steel. On the other hand, stocks from pharma and auto space witnessed a short build-up.   

Buzzing stock at the time of the opening bell is Redington, which got locked at the upper circuit after reporting impressive financial performance in Q4FY21.   

Nifty kicked off the expiry day on a positive note and thereafter, it traded in a range with a positive bias for the majority part of the day. On expected lines, volatility kicked in the last leg of the trade wherein Nifty slipped below the 15,300 mark. However, soon after that, it bounced back from the lower levels to end up by a quarter of a per cent and with this, Nifty recorded its highest closing ever.  

The price action of the day formed a high wave like candle but then, it maintained its rhythm of higher highs & higher lows. Nifty is now about 0.6 per cent away from its all-time high, which was registered on February 16.   

The adage, ‘sell in May and go away’ seemed to be obsolete this time. In fact, Nifty advanced 706.75 points or 4.83 per cent during the month. On a weekly basis, in the last five days, it went up by 431.8 points or 2.90 per cent. In May series, 79 per cent of the stocks from the Futures segments ended in the green. BHEL, UPL, Bank of Baroda, and Balkrishna Industries emerged as the top gainers of May series as they gained about 56, 33, 26 and 25 per cent, respectively. On the other hand, AU Bank, Jindal Steel, Naukri and Cummins India were the worst performers in May series as they lost between 12.5 per cent and 10.7 per cent.  

Technically, the index seemed to be in a sweet spot as all the technical indicators are showing bullish strength. The RSI is in a bullish zone while all the short and medium-term averages are trending up. Hence, traders should continue with the buy-on-dips strategy. Once Nifty moves above the previous all-time high level of 15,431, we could see the levels of 15,600-15.650 coming in the near term. On the downside, a prior bar low of 15,272 is likely to act as an immediate support level.