Market Snapshot
Yesterday, the Sensex opened with a positive gap of 30 points at 12,736, but nervousness in early trades saw the index slip to a low of 12,664.The index, thereafter, displayed range-bound movement for the major part of the session. Aggressive buying, mainly in ICICI Bank, HLL, SBI & ITC saw the index rally to a high of 12,965. The Sensex finally settled with a gain of 240 points (1.9%) at 12,946.The Nifty settled with a gain of 67 points to close at 3764.5.
The NSE and BSE cash volumes were slightly lower compared to the previous day at INR 58 bn and INR 27 bn respectively. The F&O volumes were higher at INR 330 bn.
Sentiment Indicators
The Implied Volatility (IV) across Nifty strikes has decreased to 25-27% levels. The WPCR of Nifty Options increased to 1.14 compared to the previous day while the 5 day average is 1.05.
Outlook
The markets are expected to open strong and gain further during the day on back of strong global cues and short covering which is expected to come in at higher levels. Nifty closed above the psychological resistance of 3750 levels. There are still sizeable short positions in the market which would see a squeeze and thus investors be forced to cover their positions.
Telecom stocks especially RCOM and Idea are expected to see some positive action on back of TRAI’s recommendation of cut in ADC. Cement counters are also expected to see some action with Government slated to meet industry representatives.
The Nifty will face resistance at levels of 3835 and 3885. The immediate support for Nifty will be at 3742 followed by 3702.
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