The Nifty50 continued its uptrend for the second consecutive session, after consolidation within the 18,500-18,600 range on June 5, and formed a small-bodied bearish candlestick pattern on the daily charts as the closing was lower than the opening.
The index had a gap-up opening at 18,612 and climbed up to 18,640 intraday, but dipped below 18,600 in late trade and finally closed with 60 points gains at 18,594. Overall, it traded in positive terrain throughout the session, with support at 18,500-18550 levels.
If the Nifty50 sustains uptrend amid consolidation and decisively clears the crucial hurdle of the 18,700 mark, then there could be a march towards the 18,800-18,900 area. Till then, the consolidation and buy-on-dips strategy is expected to continue given the bullish undertone of the market, experts said.
Auto was the star performer among key sectoral indices, rising over a percent. Buying was also seen in select banking and financial services, metal and pharma stocks.
"The Nifty index is currently experiencing a sideways trend, indicating a lack of clear direction in its price movement. This sideways movement is accompanied by low trading volumes, suggesting a relatively lower level of market participation and activity," Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities said.
Despite the sideways trend, he says that the overall undertone of the market remains bullish. This suggests that the prevailing sentiment favours buying opportunities on dips or temporary price declines.
He advised investors to adopt a buy-on-dip approach, indicating a strategy of purchasing the Nifty index when it experiences short-term pullbacks.
On the Option front, the maximum Call open interest was seen at 18,600 strike, followed by 18,700 strike, which is expected to be the crucial resistance area for the Nifty50. The meaningful Call writing was 18,700 strike, then 18,900 strike, whereas the maximum Put open interest was at 18,500 strike, followed by 18,600 strike, with Put writing at 18,600 strike, then 18,400 strike.
“The Nifty Index saw Put writing at 18,600 and 18,700 levels. The 18,700 becomes an In-the-Money option signalling bullishness for the week," Rahul Ghose, Founder & CEO at Hedged said.
Bank Nifty
Bank Nifty opened on a positive note near 44,100 levels, but remained consolidative in a narrow range of 100 points between 44,150 to 44,250 area for most part of the trading session. The index settled at 44,102, up 164 points and formed a Doji candlestick pattern on the daily scale as some profit booking was seen from higher zones in the last hour of the session and the closing was near its opening levels.
However, Bank Nifty negated the formation of lower highs after four sessions. "It is holding well above its 20-day EMA (exponential moving average - 43,747) on the daily scale and buy-on-dips stance is likely to continue," Chandan Taparia, Senior Vice President, Analyst-Derivatives at Motilal Oswal Financial Services said.
Taparia believes that it has to continue to hold above 44,044, to make an up move towards 44,250 levels, and then 44,500, whereas on the downside support is expected at 43,750 followed by 43,500 levels.
The broader markets remained positive for yet another session, with the Nifty Midcap 100 and Smallcap 100 indices rising 0.14 percent and 0.36 percent respectively.
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