Nifty reclaims 14,700 mark ahead of weekly expiry; Nifty IT shows stupendous rally

Update:The Indian markets scaled higher during today's afternoon session and were seen trading near the highs of the day with Nifty moving above the 14,700 mark. Sensex was also seen trading within the striking distance of the 49,000 mark.   

Among the sectoral indices, Nifty IT and Nifty Metal were the top gainers as they gained more than 2 per cent each. On the other hand, Nifty Pharma and Nifty PSU Bank witnessed profit booking.   

On the options front’, addition of open interest on the Put option side is seen in a broad range of 14,600-14,700 in today’s session. The 14,600 Put option has seen the addition of more than 40 lakh shares in the open interest, while the 14,600 Call option has shed more than 11 lakh shares in the open interest. The 14,800 Call option strike has seen an addition of 31 lakh shares in the open interest.  

Nifty opened on a positive note at 14,604 and but failed to capitalise on early gains as there was not much buying interest at higher levels. As a result, Nifty trimmed its morning gains and went into a consolidation mode but was not able to make any decisive move amid volatility. However, in the last leg of the trade, buying momentum emerged and a decisive move was witnessed, which helped the indices to close near the day’s high i.e. above the 14,600 mark, up by 121 points.   

The price action of the day formed an inside bar as the price trade within the high-low range of the prior trading session. Furthermore, the range of the day i.e., difference between high and low was lowest in the last seven trading sessions. Hence this is the NR7 bar as well. So, Wednesday’s session was IB+NR7, which signifies contraction in volatility.   

Interestingly, for the third day in a row, Nifty took support around the 100-DMA as well as managed to reclaim its 20-DMA. However, it still trades below its 50-DMA. Overall, the price structure has not changed much.  

Going ahead, Tuesday's high & low will become resistance and support for the coming trading sessions. So, 14,723 on the upside is likely to act as a hurdle while 14,461 may act as a support level. Besides, a break on either side could trigger a quick 100-point movement.