The Indian benchmark equity indices are expected to open higher on Monday following positive cues from global markets.
The trends on Gift Nifty also indicate a positive start for the Indian benchmark index. The Gift Nifty was trading flat at around 19,796.50 level as compared to Nifty’s Friday’s close of 19,646.05.
The Nifty has started the August series with relatively higher open interest of 11.7 million shares compared to nearly 9.1 million shares seen at the inception of August series. The Open Interest (OI) in Nifty is at five month high on the back of long positions getting rolled August series.
Also Read: Gift Nifty, rally in Asian markets and US stocks to Japan’s policy tweak – key triggers for Indian stock market today
The Nifty rollover was near 84%, which is significantly higher compared to last month and its three months average of 76.87%. The high rollover along with high roll premiums (~181 points) suggests that long positions which were built in July series are getting carried forward into the August series, ICICI Direct said.
Nifty
Nifty declined on Friday, but showed decent upside recovery to close the day off the lows at 19,646.05 level. On the weekly basis, Nifty fell 0.5% over the week after gaining for the previous four weeks.
The index formed a small candle on the daily chart with lower shadow, indicating the formation of doji type candle pattern.
“Normally, such doji pattern formation post reasonable upmove and down moves calls for caution for impending reversals. Hence, this doji pattern formation after one session of decline on Friday signals the possibility of minor upside bounce in the short term,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
Shetti believes Nifty continues to be in a short term downward correction and this consolidation is likely to continue for next week. According to him, any upside bounce from here could encounter strong resistance around 19,750-19,800 levels. The next crucial lower supports to be watched are around 19,500-19,450 levels.
Also Read: Buy or sell: Vaishali Parekh recommends three stocks to buy today — 31st July
Bank Nifty
Bank Nifty index declined over 200 points to end at 45,468.10 on Friday, below the key support level of 45,600. The index started the August series with relatively lower open interest compared to its July month.
“For Bank Nifty, the 20-day SMA or 45,250 could be the trend-decider level, and above the same, the index could move up to 45,700 – 45,900. On the other side, below 45,250 it could slip to 44,700-44,500,” said Amol Athawale, Technical Analyst (VP), Kotak Securities.
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Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before taking any investment decisions.
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