Nifty 50 trend reversal unlikely, but profit booking not ruled out; check technical outlook

Sensex and Nifty started the week off strong, rallying more than 2% each on Monday. The S&P BSE Sensex climbed 1,335 points or 2.25% to close at 60,611 while the NSE Nifty 50 added 389 points or 2.17% to end at 18,053. India VIX, the volatility gauge, added slipped below 18 levels while Bank Nifty settled above 38,600. Entering the second day of trading, national markets are trying to continue their momentum with SGX Nifty rising in the early hours of Tuesday. Global signals were mixed.

Global watch: On Wall Street, the NASDAQ index climbed 1.9% on Monday, followed by the S&P 500 and the Dow Jones. Among Asian stock markets, Nikkei 225, TOPIX and KOSPI were in the red, the KOSADQ index gained. Markets are closed in Hong Kong and China.

Technical approach: Soaring with the help of bulls, the Nifty formed a long bullish candle on the daily chart with a rising open, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. He added that technically this pattern indicates a strong upside breakout in the market. On the other hand, Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities believes that the Nifty maintains an uptrend formation, but due to the overbought texture, traders may prefer to book profits at lows. higher levels.

Levels to watch: Shrikant Chouhan sees 17880 as a crucial support level, and above the same the index may touch the 18150-18200 level. “On the other hand, a quick intraday correction is not ruled out if the index is trading below 17880 and below the same level it might retest the 17790-17750 level,” he added. . Nagaraj Shetti said the strength of the recent bullish move indicates that the market is unlikely to show a strong trend reversal around the 18200 levels hurdle and could possibly break above resistance on the time frame.

FII and DII professions: Foreign institutional investors (FIIs) were net buyers of domestic equities on Monday, for the fifth straight day. The FIIs injected Rs 1,152 crore into domestic equities. Domestic Institutional Investors (DIIs) were also net buyers, pushing Rs 1,675 crore.

Call and Put OI: For the April Futures & Options series, the maximum call open interest (OI) is placed at 18,000 strikes, followed by 19,000 strikes. Put OI is the most at 17,500 strikes, followed by 17,000 strikes. “Massive unwinding of shorts seen in nifty Bank futures as OI dipped back to January and February levels,” said Rahul Sharma, Director and Head of Research, JM Financial. “Clever futures also saw the PCROI unfold rising to 1.35. Strong addition was seen in 18,000 puts and 18,500 calls,” he added.