Indian stock market benchmark indices, Sensex and Nifty 50, are likely to open flat on Wednesday amid mixed global cues.
The trends on Gift Nifty also indicate a muted start for the Indian benchmark index. The Gift Nifty was trading flat at around 24,480 level.
On Tuesday, the domestic equity indices ended higher, with the Nifty 50 closing above the 24,400 level.
The Sensex rose 391.26 points to close at 80,351.64, while the Nifty 50 settled 112.65 points, or 0.46%, higher at 24,433.20.
Nifty 50 formed a long bull candle on the daily chart after a small dip of last week.
“This is a positive indication and as happened in the past (24th and 25th June), this pattern is likely to result in further upside for the market ahead. The smaller degree positive chart pattern like higher highs and lows have been noticed on the daily chart. Having formed a small higher bottom in the last week, the odds of more upside towards the new higher top is likely in the near term," said Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
He believes the underlying trend of Nifty continues to be positive. Having moved above the key overhead resistance of 24,400 levels (1.618% Fibonacci extension), the Nifty could now advance towards another important resistance of 24,960 levels (1.786% Fibonacci extension) in the near term.
Here’s what to expect from Nifty 50 and Bank Nifty today:
Nifty 50 witnessed a sustainable up move amidst range movement on July 9 and closed the day higher by 112 points.
“Nifty remained strong throughout the day, holding the support level of 24,300. The sentiment is likely to remain positive as long as it stays above 24,300, where significant put writing has occurred. On the higher end, the 24,500-24,600 range might act as an immediate resistance zone," said Rupak De, Senior Technical Analyst, LKP Securities.
Overall, he believes the sentiment may continue to favor the bulls in the near term unless the index falls below 24,300.
Rahul Ghose, CEO of Hedged.in noted that the increased writing of the put OI (Open Interest) at 24,400 levels indicates that Nifty will likely find support around this level in this weekly expiry. He said the PCR traded volatile for the day, opening at 0.98 & jumping to test 1.23, indicating the index has a bullish bias in this weekly expiry.
According to VLA Ambala, Co-Founder of Stock Market Today Nifty 50 index formed a Bullish Marubozu pattern on the daily timeframe, breaking out of its 4-day trading range.
“This indicates strong market sentiment and suggests the benchmark index could open with a gap-up in the next session. Now, if the index opens near 24,520, the level could act as resistance in the morning," Ambala said.
The support levels of Nifty are expected around 24,400 and 24,320, while the resistance is likely between 24,500 and 24,570, she added.
Bank Nifty index rallied 143.00 points, or 0.27%, to close at 52,568.80 on Tuesday.
“The Bank Nifty index witnessed a consolidated move and is stuck in a range between 52,700 - 52,100. A decisive break on either side will lead to trending moves. The index remains in a buy-on-dip mode, and a break above 52,700 will open up further upside towards 53,000, where the highest open interest is built up on the call side," said Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities.
However, if the index fails to hold the support of 52,100 - 52,000, it can decline further towards the 51,700 - 51,500 mark, Shah added.
According to Ghose, the increased writing of the call OI at 52,500 and 52,600 levels, indicates that Bank Nifty is likely to trade in a narrow range for the week. The Bank Nifty PCR opened at 0.63 & traded very volatile just to close flat for the day, indicating the index has fading momentum at the resistance zone.
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