There is no denying the fact that surpass of 5 lakh Covid-19 case in India has spooked the investors and expansion of standard deviation is highly expected in the upcoming trading sessions. However, the Indian markets are sustaining at higher levels as economic activities will continue to operate with precautionary measures. Following the weakness in the U.S. markets due to second wave of Coronavirus, the India benchmark was opened on a gap down note at 10,311.95 levels and continued to move lower led by heavy additions in Call Writing at 10,300 that drifted the index to an intraday low of 10,224.10 levels. The index eased all its losses in last hour of trading session and closed at 10,312.40 levels, with a loss of 0.68%. On sectoral upfront, indices were closed on a negative note out of which realty stocks eased 3.55%. Market Breadth was negative as 692 stocks were advanced while 1,209 were closed in the red.
S&P CNX Nifty has formed a ‘Dragonfly Doji’ candlestick pattern on daily scale that signals for indecisiveness in the sentiments of market participants with a positive bias. The primary trend line will continue to act as major support for the counter. Potential resistance is placed at 10,635.52 levels. The counter is closed above 150-days Exponential Moving Average. RSI has defended its 60 levels showing no signs of divergence and overbought. Stochastic oscillator is continued with bullish crossover.
Nifty Option Analysis
Maximum Call open interest (OI) of 26.44 lakhs contracts was seen at the 10,500-strike price followed by 11,000-strike price with 26.07 lakhs. Call Unwinding was seen at the strike prices of 11,200 levels.
The Call option suggests 10,500 will be next hurdle.
Maximum Put open interest of 23.99-lakh contract was seen at the 10,000-Strike price followed by 10,100 levels with 23.45 lakhs open contracts. There was hardly any effective Put Unwinding.
The Put option suggests 10,000 will act as a support.
Nifty Bank has formed a ‘Hammer’ candlestick pattern on daily scale in which lower prices are accepted by market participants as they sense it a value bet. The index is trading in a ‘Rising Channel’ that signals for positive consolidated move. The counter is closed above 50-days Exponential Moving Average. RSI has slipped below 60 levels and likely to remain lackluster.
Tomorrow Market View
On Tuesday, Nifty50 futures is likely to remain in a range of 10,066-10,458 levels as per the daily volatility of 1.91 levels. Formation of ‘Dragonfly Doji’ candlestick pattern on daily scale, heavy additions in Call Writing at 10,300 levels and slippage in daily volatility is likely to keep the investors on toes. A breach above 10,300 levels will trigger the formation of ‘Dragonfly Doji’ candlestick and activate more buyers to a high of 10,370 and 10,430 levels respectively.