The Indian stock market benchmark indices, Sensex and Nifty 50, are likely to open on a muted note on Friday tracking weak global market cues.
The trends on Gift Nifty also indicate a flat-to-positive start for the Indian benchmark index. The Gift Nifty was trading around 22,480 level, a premium of nearly 20 points from the Nifty futures’ previous close.
On Thursday, the Indian stock market indices ended ended almost a percent higher each led by fag-end buying across sectors amid mixed global cues.
The Sensex surged 676.69 points, or 0.93%, to close at 73,663.72, while the Nifty 50 settled 203.30 points, or 0.92%, higher at 22,403.85.
Nifty 50 formed a small bullish candle at the highs on the daily chart with a long lower shadow.
“Technically, this pattern resembles the formation of a hanging man type formation. But sometimes such formations amidst uptrend more often act as uptrend continuation patterns. The formation of long lower shadows for two occasions in the last four sessions signals emergence of sharp buying on dips. This is a positive indication and suggests more upside ahead," said Nagaraj Shetti, Senior Technical Research Analyst, HDFC Securities.
According to him, immediate resistance of 22,300 (mid part of long bear weekly candle of last week) has been taken out on the upside on Thursday and the Nifty is expected to reach another resistance of around 22,600 levels (upper part of the last weekly candle) in the near term.
Here’s what to expect from Nifty 50 and Bank Nifty today:
Analysis of Nifty put options shows a significant concentration of Open Interest (OI) at the 22,200 level, indicating robust support at this point. On the call side, there are notable OI concentrations at the 22,500 and 22,900 levels, suggesting these as resistance levels to watch, with the 22,900 level approaching all-time highs, said Mandar Bhojane, Research Analyst at Choice Broking.
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The Nifty 50 index witnessed a sharp bounce back with high volatility on May 16 and closed the day higher by 203 points.
“Finally, the index has moved back up into the rising channel after a few days of failed attempts. Over the next few days, the bulls might have the upper hand in the market as the index moved above the critical moving average after several days. On the higher side, the Nifty might move towards 22,600 in the short term," said Rupak De, Senior Technical Analyst, LKP Securities.
Support on the lower end remains at 22,250, he added saying, the sentiment is expected to remain strong as long as it holds above this level.
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The Bank Nifty index rallied 290 points to end at 47,977 on Thursday.
“The Bank Nifty witnessed a robust comeback by the bulls, overpowering the bears and orchestrating an intraday surge of 1,000 points. The next immediate hurdle for the index stands at 48,200, aligned with the 20-day moving average (20 DMA), breaching which could trigger additional short covering towards the 49,000 mark. On the downside, support is established at the 47,600 - 47,500 zone," said Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities.
As long as this support level remains unbreached, the bullish sentiment prevails, Shah added.
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