Sensex, Nifty continue setting fresh highs, charts suggest further upside potential

US Stocks, S&P 500 Index, Tesla, Moderna, investors, Short sellersOn Friday, Foreign Institutional Investors bought Rs 1,981 crore worth of domestic securities.

S&P BSE Senesex and NSE Nifty 50 were seen resuming their upwards march on Wednesday as the benchmark indices set record highs once again. Sensex now sits at 46,666 while the 50-stock Nifty is at 13,682. Broader markets outperformed benchmark indices and volatility slipped marginally. So far this month, benchmark indices have zoomed over 5.5% each already. On Thursday morning, cues from global peers were mixed as Dow Jones closed in red on Wednesday but NASDAQ and S&P 500 gained. Major Asian stock markets were trading higher except KOSPI.

What do the charts say: “A small positive candle was formed with a long lower shadow. Nifty closed above the last four sessions upper range of 11590 levels. Technically, this pattern indicates an upside breakout of the small range at 13600,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. Nifty’s trend is positive with immediate support at 13,580, he added. Nifty trading above its 21 Days Moving Average shows a positive trend, according to Sumeet Bagadia, Executive Director, Choice Broking who adds that Nifty has strong support at 13530-13450 while strong resistance at 13750-13825 levels.

Global cues: ON Wednesday the US Federal Reserve said that it will continue to buy bonds to support the US economy. Wall Street saw Dow Jones closed with losses while NASDAQ and S&P 500 gained. Among Asian peers, Hang Seng, Shanghai Composite, Topix and Nikkei 225 were trading with marginal gains while KOSPI was trading with losses. 

FII and DII activity: On Friday, Foreign Institutional Investors (FII) bought Rs 1,981 crore worth of domestic securities while Domestic Institutional Investors (DII) sold Rs 1,718 worth of stocks.

Deals: Nomura Singapore bought shares of CSB Bank on Wednesday, Kotak Securities bought shares of Indiabulls Housing Finance. Adani Logistics continued to sell shares of Snowman Logistics. Third Alpha LLP bought shares of Majesco, the IT firm that has announced a Rs 974 per share dividend.

Call and Put data: For the December series maximum Call Open Interest (OI) is placed at 13,000 strike with 23.05 lakh contracts, followed by 20.80 lakh contracts on 14,000 strike. Put Open Interest is most at 13,000 strike with 42.75 lakh contacts. This is followed by 30.96 lakh contacts on 13,200 strike. 5.42 lakh contracts were added at 13,500 strike.

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