Nifty Overview & Outlook

The Nifty, following the lead of other major Asian indices, opened Tuesday’s session positively and maintained a gradual upward trend throughout the day, closing with gains of nearly half a percent. The market cheered by foreign inflows and strong performances from leading Auto and some FMCG companies. The Nifty Bank also closed higher, though with a modest gain of 0.3%.

In the broader market, the Midcap index outperformed slightly, rising by 0.4%, while the Smallcap index lagged, declining by 0.3% compared to the benchmark index.

Sector-wise, the Auto sector led the gains with a robust gain of 2.2%. Other sectors such as Pharma, PSU Banks, Realty, and FMCG also saw gains of around 1% each. However, Nifty IT and Energy sectors experienced marginal declines. Market breadth within the Nifty 500 index was positive, with 272 stocks advancing and 226 declining.

Technically, the Nifty achieved another record closing high, but there is ongoing consolidation on a daily basis. The 14-period RSI has broken through multiple resistances and previous swing highs, but in the overbought zone. Consequently, wait-n-watch is advised, and traders are suggested to focus on specific stocks. Resistance is observed at 24,750, with support levels now adjusted slightly higher to 24,300 and 24,165.

Derivatives Overview & Outlook

Yesterday, short covering was seen in Finnifty futures with decrease in open interest by 11.4%, whereas some long buildup was seen in Nifty futures with increase in open interest by 1.5% while no significant change was seen in Banknifty and Midcapnifty futures on open interest front.

Performance on the sectoral front was mix. Cement, FMCG, Pharma and Power stocks witnessed maximum addition of long positions whereas short covering was seen among Auto and Telecom stocks.

On options front, put writing was seen at multiple strikes with maximum positions are at 24000 PE closely followed by 24300 PE and 25000 CE followed by 24500 CE.

Institutional Trading Activity

Yesterday, FIIs bought stocks worth Rs 314 Cr in the cash segment, bought index futures worth Rs 498 Cr and also bought stock futures worth Rs 1246 Cr. DIIs too were net buyers in the cash segment to the tune of Rs 1416 Cr.

Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 24520-24600; Supports 24400-24350

Banknifty – Resistances 52800-53080; Supports 52350-52200

Finnifty – Resistances 23750-23820; Supports 23500-23400

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