Nifty slips into red, 17,200 Call witnesses massive OI addition; Smallcap index trades near day's low

Market Update at 11:15 PM: Nifty slips into negative terrain as profit booking emerged at higher levels. Nifty is trading down by 0.19 per cent at 17,098 levels. A divergent trend was seen in the broader market indices with Nifty Midcap 100 hovering around the neutral line while Nifty Smallcap 100 dropped 0.33 per cent.   

Market breadth weakens as advance-decline ratio tilts in favour of declines.   

Among the sectoral indices, a majority of indices were seen trading in red with Nifty Metal leading the losers' pack. On the other hand, Bank Nifty emerged as the top gainer.   

On the options’ front, the 17,200 Call options see the addition of over 30 lakh shares in the open interest on Wednesday. With this, the maximum concentration of open interest stands at 17,200 Call options.   

Market Update at 10:00 AM: Bulls’ party continues on D-Street as Indian benchmark indices touched yet another milestone with Nifty crossing the 17,200 mark and Sensex inching close to the 58,000 mark.   

The broader market indices were also seen participating in the run with Nifty Midcap 100 and Smallcap 100 advancing 0.74 per cent and 0.43 per cent, respectively.  

Among the sectoral indices, Nifty Realty and Nifty Bank emerged as the top gainers while Nifty Metal and IT were the top losers.   

Interestingly, on a green day, India VIX has jumped over 6 per cent and touched a fresh 20-day high.    

It was a very special day for the Indian benchmark indices as both Nifty and Sensex crossed milestone levels of 17,000 and 57,500, respectively. Nifty and Sensex jumped 1.91 per cent and 1.6 per cent, respectively. It took almost 19 trading sessions for Nifty to cross the level of 17,000 from the 16,000 mark.     

The broader market indices too witnessed buying interest but they underperformed the benchmark indices with Nifty Midcap 100 and Smallcap 100 adding 0.59 per cent and 0.69 per cent, respectively.   

The market is a forward-looking machine. It always begins to price good news before it shows up in the tabloids or media and the testimony of this is that on Tuesday after the market hours, GDP data was released wherein India’s GDP growth touched a record high on a low base in Q1FY22. It was led by a rebound in consumer spending and improved manufacturing despite devastating COVID-19 second wave. Furthermore, India administered over 1.2 crore COVID vaccine doses on Tuesday. As a result, it set a new record for a single day.   

On the daily chart, Nifty formed a strong bullish candle and extended its winning streak for the seventh straight session on Tuesday. Nifty has maintained its rhythm of making higher high & higher low and as long as this sequence continues, buying-on-dips would be a preferable strategy.   

Going ahead, the level of 17,240 is a key level to watch out for on the upside. On the other hand, the level of 17,000 is crucial on the downside.

With this ferocious move, which has been witnessed in the recent past, we believe Nifty might consolidate in the near term and also, continues the stock-specific action. Why do we say so? Nifty witnessed a seven-day winning streak while in the past, the maximum winning streak has been up to 7-8 trading sessions. Furthermore, the price has closed above the Bollinger Band. Also, the spread between the 5-EMA and 21-EMA has reached the highest level since February.   

Keep a close watch on auto stocks on Wednesday as the auto sales will start pouring in.