On the monthly expiry day, the benchmark index finally managed to close in the green after three days of losing streak, aided by buying in HDFC twins and ICICI Bank amid mostly positive trends in global equities. The broader Nifty50 rebounded to close above 17,200, while the Sensex settled with over 200 points gain on Monday. Whereas, the Nifty midcap and small-cap indices settled with around 1.35% and 0.60% gains respectively. India Vix is significantly down by more than 10%.
What lead the rally in yesterday’s trading session & what’s ahead??
Domestic indices reversed their trend and traded with gains as the broad market is in the oversold territory and fundamentally valuations are just below the three-year average. A key reason for the current correction is selling by FIIs and a reduction in domestic buying. A drop in FIIs selling will be an important reason for the bounce. Moreover, we should note that the fiscal measure announced by the Indian government to control inflation is positive for the domestic market, but the rising US bond yield and uptick in crude oil prices can unsettle the markets going ahead and investors need to be really careful about this before taking a major exposure.
Market Summary
Nifty (up 0.90%) – Open 16105.00, High 16204.45, Low 15903.70, Close 16170.15
Bank Nifty (up 2.20%) – Open 34670.60, High 35222.05, Low 34424.75, Close 35094.90
Sensex (up 0.94%) – Open 53950.84, High 54346.22, Low 53425.25, Close 54252.53
India Vix – down 10.15% to end at 22.7175 levels biggest single-day fall in one day in last 2 months in India Vix.
FII’s: Net Sellers : ( – 1597.84 Crores )
DII’s: Net Buyers : ( + 2906.46 Crores )
Bullish Sectors – PSU BANK (+3.16%), METAL (+2.67%)
Bearish Sectors – FMCG (-0.22%), ENERGY (-0.07%)
Top Gainers Stocks – TATA STEEL (+5.29%), JSW STEEL (+4.40%)
Top Losers Stocks– ITC (-2.20%), UPL (-2.17%)
Nifty Open Interest Put Call Ratio (PCR): 0.99
Maximum CE Open Interest Strike:17000
Maximum PE Open Interest Strike: 14500
Bank Nifty Open Interest Put Call Ratio (PCR): 1
Maximum CE Open Interest Strike: 34000
Maximum PE Open Interest Strike: 35000
(The maximum CE PE open interest strike rate indicates that the market is likely to move in that particular range in the coming days)
Technical View of Nifty and Bank Nifty
Nifty
Indian Stock Markets witnessed healthy short covering towards the closing hours that helped key indices to reverse the 3-day losing streak. With the US FOMC minutes out of the way and hence we witnessed strong buying on the F&O expiry day.
While we may see bouts of selling going ahead due to other negative factors like higher inflation, continuous FII selling, & the Russia-Ukraine conflict, relief rallies will still be seen amidst volatility.
On daily charts, the Nifty has formed a long-leg Hammer formation which supports a further uptrend from the current levels.
NOW, WHAT TO EXPECT ??
The fight between the bulls and bears continued in the Nifty index and a breakout above 16200 will confirm the up move till 16300–16350.
The lower end of the 16000-16030 zone will act as a cushion and a decisive break below this will only lead to further selling pressure till 15930–15850.
Bank Nifty
On hourly charts, the financial benchmark index gave a breakout of a resistance zone and sustains above the zone, which indicates more bullish momentum in an upcoming session.
The hourly momentum indicator RSI has been showing positive momentum.
All the PSU and PRIVATE banks ended on a positive note.
NOW, WHAT TO EXPECT ??
The fight between the bulls and bears continued in the Bank Nifty index and a breakout above 35200 will confirm the up move till 35500–35700.
The lower end of the 35000-34900 zone will act as a cushion and a decisive break below this will only lead to further selling pressure till 34750—34500.
Top Stock Recommendations For Today (27th May 2022)
JUBLFOOD (FUTURES)
A momentum indicator RSI & MACD is suggesting a positive crossover on an hourly chart, which adds positive strength for the coming day. The stock is ready for the fresh breakout with good volumes. We will expect an upside move in this stock in days to come
Strategy – Traders can grab JUBLFOOD Futures above 2672 for the target of 2800 in the coming days. Support and stop loss will be below 2600 on a closing basis.
POONAWALLA (CASH)
Stock is trading near its resistance zone and formed a range. If break and sustain above given levels, we may expect a good up move in a shorter time frame.
Strategy – Traders can grab POONAWALLA above 235.50 for the targets of 241 and then 245 in the coming days. Support and stop loss below 230 on a closing basis.
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