Market Snapshot
Taking cues from its global counterparts, the Indian indices also opened yesterday's proceedings on a strong note. With bulls managing to clock further gains during the final hour of trade, Markets closed well inside the positive territory for the second day running. The BSE Sensex closed at 12,787 while the NSE Nifty closed at 3,733.
The NSE and BSE cash volumes were slightly higher compared to the previous day at INR 70 and INR 32 bn respectively. The F&O volumes were lower at INR 220 bn.
Sentiment Indicators
The Implied Volatility (IV) across Nifty strikes has increased to 27-28% levels. The WPCR of Nifty Options decreased to 0.72 compared to the previous day while the 5 day average is 0.83.
Outlook
We expect market to open slightly positive taking strength from yesterday’s gains. However, over the course of day, we expect that markets should see some selling pressure around the levels of 3725-35, and remain range-bound as volatility has dropped and the investors are cautious before the long weekend.
The metals stocks are expected to exhibit strength on the back of strong base metal prices. IT stocks, however, are expected to turn negative again because of strong appreciation in the rupee. Automobile stocks are expected to continue their weak run, following weak growth in the sales and the rising interest rates.
Nifty has a strong resistance at 3750 followed by 3763, and finds support at 3726 and 3695. We would recommend creating subtle short positions on Nifty futures, if it fails to cross the resistance levels of 3750.
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