Nifty Overview & Outlook

The Nifty benchmark index surprised with a positive opening today, driven by strong initial performances from leading IT companies following their Q1 results meeting expectations. Initially breaking out of its consolidation phase, Nifty surged through the first half of the session. However, profit booking was seen in the later half due to weakness in heavyweight banking stocks. Nifty closed the day with a gain of 0.8%, while Bank Nifty showed underperformance, ending the day flat.

In contrast, in the broader market both Midcap and Smallcap indices lagged behind the benchmark, closing marginally lower by approximately 0.2% and 0.3% respectively.

Among sectors, Nifty IT led the gains with an impressive rise of 4.5%, followed by Nifty Media which surged 2%, primarily driven by dynamic newsbased surge in ZEEL. Conversely, Nifty Realty was the top loser with a decline of 1.5%, trailed by the PSU Banking index which fell by 0.5%. Market breadth remained negative, with 219 stocks advancing and 279 declining, indicating a limited concentration of stocks attracting buying interest.

From a technical point of view, Nifty attempted a breakout during intraday trading but reversed course in the second half, ultimately closing within its prior range at the peak, though in positive territory. Key resistance levels are identified at 24,575, followed by 24,710 and 24,840, while immediate support levels are at 24,361 and 24,140 as the intraday hourly chart has displayed a Shooting Star pattern, suggesting a potential bearish reversal and prompting some profit booking.

Derivatives Overview & Outlook

Last Friday, long buildup was seen in Nifty and Midcapnifty with increase in open interest by 3.6% and 4.6% respectively. On the other hand, Banknifty futures open interest shed by 3.6% on long unwinding, whereas Finnifty futures added around 1.6% of open interest as short buildup.

Performance on the sectoral front was mix. Amongst them, short buildup was observed in Capital Goodsstocks and some long unwinding was seen in Media and Oil & Gas stocks.

On options front, put writing along with some call addition was seen at multiple strikes and maximum positions are at 24000 PE followed by 24400 PE while the maximum call positions are at 25000 CE.

Institutional Trading Activity

Last week, FIIs bought stocks worth Rs 8243 Cr in the cash segment, sold stocks futures worth Rs 3102 Cr and also sold index futures worth Rs 4175 Cr. DIIs were net buyer in the cash segment to the tune of Rs 5390 Cr during the week.

Nifty Futures, Banknifty Futures and Finnifty Key Levels

Nifty – Resistances 24600-24700; Supports 24480-24300

Banknifty – Resistances 52800-53000; Supports 52000-51800

Finnifty – Resistances 23800-23900; Supports 23550-23480

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