The Nifty50 extended the uptrend to a fifth consecutive session to close at a record high on May 27, the expiry day for May derivative contracts. Banking & financials, technology, metals and select auto stocks supported the market.
The Nifty formed a small bullish candle on the daily charts as the closing was higher than the opening level. The index is heading towards fresh record high in the June series as it closed above the near-term resistance present around 15,336, experts said.
Considering the overbought nature of the market and choppiness in the market, short-term traders should remain neutral on the index in the next session before initiating a directional bet, Mazhar Mohammad, Chief Strategist–Technical Research & Trading Advisory at Chartviewindia said.
The volatility was below 20 again, falling 4.6 percent from 20.87 to 19.91 levels. "India VIX needs to hold below 20 to extend the bullish market momentum towards new life-time territory," said Chandan Taparia of Motilal Oswal.
After opening higher at 15,323.95, the Nifty hit the day's high of 15,384.55 and low of 15,272.50. The index signed off with 36.40 points gains at 15,337.90.
The bulls appear to be heading to test lifetime highs present around 15,431 levels as the index closed above the near-term resistance of 15,336, Mohammad said. “However, today's upmove can be driven by expiry related factors and hence it looks critical for this counter to sustain above 15,272 levels to retain positive bias," he said.
Beyond 15,431, strength may eventually get extended towards 15,650 levels, he said.
If bulls fail to sustain above 15,272 on a closing basis, the Nifty may slip into a corrective and consolidation phase. “Moreover, some of the momentum oscillators on lower time frame charts are slipping into overbought zones and hence some caution is also warranted on the part of bulls," Mohammad added.
Since it is beginning of new series, option data is scattered at different strikes. On the options front, maximum Put open interest is at 14,000 followed by 14,500 strike, while maximum Call open interest is at 16,000 followed by 15,800 strike. Call writing is at 15,300 and 15,800 strike while Put writing is at 15,000 then 14,700 strike.
The options data indicates a trading range of 15,000-15,800 for the coming session.
The Bank Nifty opened flat at 34,664.20 but managed to hold 34,500 and saw buying interest through the day to hit a high of 35,220 in dying minutes. It closed near the day’s high, gaining 410.9 points at 35,095.10.
"The index formed a bullish candle on daily scale and moved higher after the consolidation of last three sessions. Now it has to hold above 35,000 to witness an upmove towards 35,500 and 36,000 levels, while on the downside, support is seen at 34,750 and 34,500 levels," said Chandan Taparia, Vice President | Analyst-Derivatives at Motilal Oswal Financial Services.
On the stocks front, bullish setup was seen in PNB, Piramal Enterprises, Mindtree, Zee Entertainment, SBI, Marico, Siemens, Mahanagar Gas, Mcdowell, UltraTech Cement, Kotak Mahindra Bank, Axis Bank, Grasim, Tech Mahindra, Godrej Consumer Products, IndusInd Bank, Wipro, Titan, Hero MotoCorp and TCS. Weakness was seen in Cummins India, Cholamandalam Investment, HDFC, Tata Chemicals, Adani Ports, ONGC, NTPC and M&M Financial, Chandan added.