The growing heat in Northern India can be assumed from the Indian benchmark index as the index is looking unleashed after forming its life-time highs and closing at near its high levels. Nifty50 had a decent opening today, started gaining momentum, managed to sustain at higher levels and closed at 12,088.55 levels.
S&P CNX has formed a ‘Bullish Belt Hold’ candle stick pattern in today’s session, which signals the strength of the buyers in current rally and points on further upside. The 50-stock bundle is closed above the psychological resistance of 12,000 levels for the very first time and expected to continue its bullish momentum with lower volatility. Stochastic oscillator is hinting for more upside and showing no signs of bearish divergence and overbought position. Elder’s Force Index that collaborate the deviations in closing prices and volumes is closed above zero levels.
Potential Supports and Resistances
On daily scale, potential supports are placed at 11,871 and 11,765 levels that could cushion the index if market participants place some long liquidation while resistances are placed at 12,100 (Gann’s perfect square of 110) and 12,210 levels that could act as a reversal points if market participant feel some overbought situation.
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On Tuesday, Nifty50 is likely to remain in a range of 11,982.68-12,244.32 levels as per the daily volatility of 1.08 levels. The closing of the index above the resistance of12, 000 levels and formation of ‘Bullish Belt Hold’ are pointing for formation of more positions by the buyers and traders should exploit every opportunity to buy the index on dips. The traders could witness more formation longs once the index will cross the 0.382% ratio that is placed at 12,163.47 levels while shorts formation will be seen below 12,063.53 levels.
The Nifty Bank closed at 31,653.65 levels today. Nifty Bank, which is known for outperforming the Nifty50, didn’t manage to form and closed at life-time highs as market participants are waiting for RBI policy that will be revealed on June 06, 2019. On daily scale, a strong support is placed near 30,676.33 levels. Stochastic oscillator and RSI are hinting for more upside and showing no signs of overbought and divergence respectively. The index is expected to witness more long formations once it will break 31,786 levels.
Nifty Option Analysis
Maximun Call Open Interest of 14.87 lakhs was seen at the strike prices of 12,100, which wll act as a resisatnce this week expiry followed by 12.55 lakhs contracts at 12,200 strike price while maximun Put Open Interest of 25.95 lakhs contracts was seen at the strike prices of 12,000, which wll act as a strong support this week expiry followed by 25.14 lakhs contracts at 11,900 strike price.
There was hardly any effective Call Writing while additions to Put writing was seen at the strike price of 12,000 followed by11,900. Call Unwinding was seen at the strike price of 12,000 followed by 11,900. There was hardly any Put Unwinding.
FII and DII Activity
Foreign institutional investors (FIIs) bought shares worth Rs 7,813.57 crores (Equity Cash+ Stock Future+ Index Future) crore while domestic institutional investors (DII) sold worth Rs 462.69 crore in the Indian equity market, as per provisional data available on the NSE.
STOCK OPEN INTEREST BUILDUP