Market Snapshot
Yesterday, the Sensex opened with a significant positive gap of 126 points at 13,072, and did not bother to look back. The markets got another booster dose as the US Federal Reserve kept the benchmark interest rates unchanged. Unabated buying saw the index rally to a high of 13,326. The index thus gained 1,010 points from the low of 12,316 hit last Friday. The Sensex finally closed today with a hefty gain of 362 points (2.8%) at 13,308. The index is now up 878 points (7%) in the last four trading days. Nifty Settled with a gain of 111 points to close at 3876.
The NSE and BSE cash volumes were higher compared to the previous day at INR 78 bn and INR 35 bn respectively. The F&O volumes were also higher at INR 402 bn.
Sentiment Indicators
The Implied Volatility (IV) across Nifty strikes has decreased to 26-30% levels. The WPCR of Nifty Options decreased to 0.98 compared to the previous day while the 5 day average is 1.07.
Outlook
The markets are expected to open flattish in line with global cues and no major news flow coming in today. The Nifty might consolidate after gains from previous trading sessions. However, we could see some profit booking to come in above Nifty levels of 3900. SEBI's announcement to allow short selling by institutions is seen as a positive as it will add liquidity to the capital markets.
Banking sector might continue to see strength as fresh buying will come in and shorts are covering their positions. Bajaj Auto is our top buy candidate in the Auto segment as we expect the Automobile stocks to gain further from current levels.
As expected, the roll levels have contracted to -7 and we advise the short rollers to be aggressive at Nifty levels of -5.
The Nifty staged a strong recovery and showing straight 7.5 % gains in the last 4 days the technical charts indicate that its time for Nifty to settle down. The next resistance for the Nifty index is at 3886 followed by 3900 which will be a strong resistance for the Nifty. On the lower side, the Nifty has a support at 3848 followed by 3818.
The Nifty staged a strong recovery and showing straight 7.5 % gains in the last 4 days the technical charts indicate that its time for Nifty to settle down. The next resistance for the Nifty index is at 3886 followed by 3900 which will be a strong resistance for the Nifty. On the lower side, the Nifty has a support at 3848 followed by 3818.