Nifty recovers from days low; Smallcap index outperforms!

Market Update at 12:55 PM: Nifty has recovered nearly 80 points from the day’s low and is seen trading with a minuscule loss of 0.08 per cent. It has reclaimed its important psychological level of 17,350. The broader market indices were seen outperforming the frontline indices with Nifty Midcap 100 & Smallcap 100 inching higher by 0.23 per cent and 0.55 per cent, respectively.   

Among the sectoral indices, it's even-steven with Nifty Media and IT being the top performers while on the other hand, Nifty Energy and Bank turned out to be the top losers.  

Market Update at 10:10 AM: Indian key benchmark indices have slipped into negative terrain in the early deals on Monday. Nifty and Sensex plunged nearly half a per cent with Nifty slipping below the 17,300 mark while Sensex is hovering around its important psychological mark of 58,000.   

Among the sectoral indices, Nifty Media, IT & metal were trading in green while Nifty Energy & Nifty Bank turned out to be the top losers.   

On the options’ front, the 17,300 Call and Put options have seen aggressive addition in the open interest (OI). Nifty 17,300 Call has added nearly 19 lakh shares in the open interest in today’s session itself while 17,300 Put option added 18.32 lakh shares in the open interest. The 17,400 Call option has also added 18.47 lakh shares in the open interest, which suggests that the upside should be capped. 

Nifty began the truncated week on a buoyant note and recorded a fresh all-time high of 17,429.55. On the very next day i.e. Tuesday, it went on to surpass its fresh all-time high of 17,429.55 and logged a new all-time high of 17,436.50. Thereafter, we have witnessed a tug of war between the bulls and the bears. However, the bears are not able to get any sort of advantage, and the testimony of this lies in the formation of lower shadows, which clearly indicates that the template of ‘buy on dips’ is still in place. The lower shadow indicates that all the dips are being bought on D-Street. 

Nifty extended its winning streak for the third straight week as it logged gains of 0.26 per cent on a weekly basis. During the last week, the index consolidated in a narrow range of 182 points and this is probably one of the narrowest weekly ranges witnessed since July last year. Furthermore, on the daily chart on Thursday, Nifty had formed an NR7 bar as well as an inside bar. So, Thursday’s session was NR7+IB, which signifies a contraction in volatility.  

Going ahead, the level of 17,436.50 and 17,254 are likely to act as immediate resistance and support levels while a break on either side could trigger a quick 100-150 point movement in the index. Hence, watch out for these levels.