The Nifty50 had a strong day as it remained higher throughout the session on May 8. The index recouped all its Friday losses and closed at a fresh 2023 high, driven by banking & financial services, auto, FMCG, technology, and metal stocks.
The index opened higher at 18,121 and as the day progressed it extended gains up to 18,287 in the later part of the session. Finally, the index jumped 195.40 points or 1.08 percent to close at 18,264 and formed a bullish candlestick pattern on the daily charts, making higher high and higher low formations.
The index successfully surpassed the short-term resistance of 18,200 levels. It needs to hold on to the same to march towards the 18,300-18,500 area, with support at the psychological 18,000 mark, experts said.
"Post reversal, the index successfully cleared the short-term resistance of 18,200, which is broadly positive. On daily charts, the index has formed a bullish candle and currently, it is comfortably trading above the 18,200 level, which would be the sacrosanct support level," Shrikant Chouhan, Head of Equity Research (Retail) at Kotak Securities said.
Above the same, the index could move up to 18,350-18,400, whereas on the flip side below 18,200, the uptrend would be vulnerable, he feels.
On the Option front, the weekly maximum Call open interest was at 18,500 strikes, followed by 18,300 strikes and 18,200 strikes, with Call writing at 18,500 strikes, then 18,400-18,300 strikes, whereas the maximum Put open interest was at 18,200 strikes, followed by 18,100 and 18,000 strikes, with Put writing at 18,200 strikes, then 18,300 strike.
The above Option data indicated that the trading range for Nifty50 in coming sessions is expected to be 18,000-18,500.
Bank Nifty opened on a positive note at 42,797 and extended its move towards 43,419 levels during the session. The index closed the day with decent gains of 623 points or 1.46 percent at 43,284 and formed a big bullish candle on a daily scale as good buying was seen in banking stocks, but it failed to surpass its previous day’s high.
"The index has to continue to hold above the 43,000 mark to make up move towards 43,600, then 43,750 levels, whereas on the downside support is expected at 43,000 then 42,750 levels," Chandan Taparia, Senior Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
The volatility has been rising for yet another session. India VIX, which measures the expected volatility for the next thirty days in the Nifty, was up by 2.76 percent from 12.30 to 12.64 levels.
The broader markets also gained strength with the Nifty Midcap 100 and Smallcap 100 indices rallying around 1 percent each.
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