Volatility caps gains near key resistance

Gap-up opening fades across Nifty, Sensex and Bank Nifty; indices hold gains with support seen at lower levels

Motilal Oswal Wealth Management

Mumbai

Nifty index opened gap up by around 570 points on account of easing global tensions and attempted recovery towards 22950 levels but failed to hold above the same and sunk towards the end. It formed a bearish candle on the daily frame and closed near its lower band but with gains of around 500 points. Now it has to cross and hold above 22750 zones for a bounce towards 22950 then 23050 zones while supports have shifted higher to 22500 then 22400 zones.

On option front, Maximum Call OI is at 23000 then 22500 strike while Maximum Put OI is at 21500 then 22000 strike. Call writing is seen at 22500 then 23500 strike while Put writing is seen at 21500 then 22500 strike. Option data suggests a broader trading range in between 21800 to 22800 zones while an immediate range between 22000 to 22600 levels.

S&P BSE Sensex index opened with a sharp gap up of around 1800 points. The session witnessed volatile swings on either sides with a slight bearish undertone. Despite some intraday profit booking the index managed to hold most of its gains and closed higher with gains of around 1190 points. On the daily chart it formed a bearish candle but has negated the recent lower lows formation showing some improvement in the short term trend. Now it has to cross and hold above 73500 zones for a bounce towards 74000 then 74500 zones while a hold below the same could see weakness towards 72500 then 72000 zones.

Bank Nifty index opened gap up by more than 1200 points but failed to hold its gains and drifted lower towards 51000 zones in the first half of the session. However buying interest was again seen from the lower levels towards 52000 zones but it remained quite volatile in the latter part of the session. It formed a small bodied candle on the daily scale as buying interest was seen at lower levels but momentum was missing at higher zones. Now it has to hold above 51250 zones for a bounce towards 52000 then 52500 zones while a hold below the same could see some weakness towards 51000 then 50500 levels. Nifty future closed positive with gains of 1.80% at 22830 levels. Positive set up seen in Avenue Supermart, Premier energies, BSE, PNB Housing , CAMS, National Aluminium, Vedanta, MCX, Persistent and Auro Pharma while weakness in Bharti Airtel, MFSL, Ashok Leyland, Bluestar, Cipla, SBI Card, Voltas, Havells, NTPC and ICICI Lombard.