Indian market outperformed global peers on Monday as the S&P BSE Sensex rallied by nearly 400 points while the Nifty50 surged more than 100 points in trade.
Let’s look at the final tally on D-Street – the S&P BSE Sensex rose 395 points to 52,800 while the Nifty50 closed with gains of 112 points at 15,834.
"Domestic indices witnessed a gap-up opening and maintained the levels despite mixed sentiments seen in global equities. In line with contraction in manufacturing PMI, India’s Service PMI for June fell to 41.2 against 46.4 in May, having no negative impression on the market,” Vinod Nair, Head of Research at Geojit Financial Services said.
“A strong US job data signalled that the economy is recovering at a steady pace which eased concerns over an earlier-than-expected interest rate hike by the Fed,” he said.
Nair further added that the overall optimism boosted appetite for most sectors barring IT and Pharma, while small and mid-cap stocks continued their outperformance"
Sectorally, the action was seen in realty, metals, banks, and the public sector, while some profit booking was seen in the power sector.
On the broader markets front – the S&P BSE Midcap index rose 0.35 percent, and the S&P BSE Smallcap index was up 0.78 percent.
India VIX fell down marginally by 0.19 percent from 12.09 to 12.06 levels. Lower volatility indicates a range-bound move but at the same time decline could be bought.
On the options front, the maximum Put OI is placed at 15500 followed by 15000 strikes while maximum Call OI is placed at 16000 followed by 16500 strikes. Options data suggests an immediate trading range in between 15600 to 16000 zones.
Here’s what experts suggest investors should do on July 6:
Expert: Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services
Nifty50 closed with gains of around 110 points and gave the highest daily close of the last six trading sessions. It negated its lower lows formation of the last four sessions and formed a Bullish candle on the daily scale followed by a Hammer last Friday.
Now, the index has to hold above 15800 zones to witness an up move towards 15915 and 16000 zones, while on the downside support can be seen at 15700 and 15600 zones.
Expert: Ashis Biswas, Head of Technical Research at CapitalVia Global Research Limited
After a few days of the lacklustre movement, the market witnessed a positive trend on Monday. The market is likely to remain rangebund between 15800 on the downside and 15950 on the higher side.
It is crucial for the bulls to sustain above the 1580 level. The momentum indicators like RSI and MACD have recovered from their respective oversold zone and support the upside move.
Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments
The markets have been in fine form for the entire duration of trade today. However, we should take a call on the upside only when we cross 15900 on a closing basis.
That would trigger renewed interest and momentum which should take Nifty to 16100. The index is still rangebound between 15400 and 15900.
Expert: Rohit Singre, Senior Technical Analyst at LKP Securities
For a fresh move above the recent swing high, the index needs to give a decisive close above 15900 zone, as only then we may see a fresh up move towards the 16000-16100 zone.
The immediate hurdle zone is placed 15900, and good supports are shifted to 15790-15700.
Expert: Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas.
Nifty had taken support near multiple parameters like 61.8% retracement of the previous rise from 15450 to 15915, the daily lower Bollinger Band, the lower end of a falling channel on the hourly chart & lower end of a rising channel on the daily chart.
From these supports, it had started the next leg up on July 02. The index witnessed follow-through action on the upside on Monday. On the way up, it has broken out from the falling channel on the hourly chart.
Also, the daily Bollinger Bands are about to expand after a sharp contraction. This shows that a sharp move is in the offing & that is expected to develop on the upside. The Nifty is now once again approaching the key barrier of 15900.
Once that is crossed on a closing basis, the Nifty will be set for a swift rally towards 16400. On the downside, the swing low of 15635 will now act as crucial support.
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