Broader markets outperform; 15,800 level becomes make-or-break level for Nifty as per options data
Market Update at 01:45 PM: The key benchmark indices were seen trading in green with Nifty trading above the 15,800 mark while Sensex above 52,750 mark. Meanwhile, the broader markets were seen outperforming the frontline gauge as Nifty Midcap 100 & Nifty Smallcap 100 jumped 1.58 per cent and 0.62 per cent, respectively.
Among the sectoral indices, majority of the indices were seen trading in green with Nifty Media and Nifty Pharma being the top gainers.
On the options' front, the 15,800 put option has seen the addition of nearly 52.94 lakh shares in the open interest on Friday itself. As a result, the total open interest in 15,800 put strike has touched 71 lakh shares. On the other hand, the 15,800 Call option has seen the addition of nearly 38.84 lakh shares in the open interest while the maximum concentration of open interest is seen at this strike itself.
Nifty continues to move around the 20-DMA, with a spike in the daily ranges. It took support at 50-DMA twice during the last seven days. During the consolidation phase, the swings were limited to only two to three days. Nifty is still at the level of June 7. It has not moved anywhere during the last two months. Since July 1, Nifty has just added 61 points, and it is exactly at the mid-point of the consolidation range. Because of this sideways action, the Bollinger bands are moving like parallel lines. The momentum is completely neutral.
There are some positives that appeared in the index after Wednesday's massive recovery from the lower levels. The price made a lower low, but the RSI made a higher low. This condition is meeting Andrew Cardwell's rules for bullish entry. Unless the RSI closes below 48, the index may trade with a positive tone. The daily +DMI is showing an uptick, and the ADX crossed the double-digit figure, which indicates that the positive strength is improving. It formed a hammer kind of candle on Wednesday, which is also bullish while on Thursday, Nifty has managed to close above hammer candle high, which is a confirmation of the bullishness.
Going forward, whether Nifty moves above 15,900 levels decisively or not, that's the big question, which most probably, would be soon answered as key events are lined up in the upcoming week, which includes RBI policy meet as well. The consolidation is in a near mature stage. A complete bar closing above 15,900 along with RSI above 56, is a very positive sign, which would result in Nifty testing the levels of 16,240 initially.