Gold Prices corrected sharply in the last session as the dollar pared losses while investors focused on the outcome of the US Senate run-off election in Georgia. Therefore, ICICI Securities believes that gold prices will remain in the range of Rs 50300 – Rs 51000 levels in the short-term.
Nifty and Bank Nifty today:
The Nifty snapped its 10-day winning streak and ended with a loss of around 50 points. In the second half, profit taking was seen in leading heavyweight stocks, which led the index to drift lower to 14050. However, a late recovery in BFSI and cement stocks helped the Nifty recover its intraday losses. On the options front, 14200, 14300 Call holds significant OI that should act as an immediate hurdle on upsides. Nifty futures ended at a premium of 43 points while IV rose by 2.5%. © The major Put base is at 14000 strike with almost 33 lakh shares while the major Call base is at the 14200 strike with almost 49 lakh shares.
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The Bank Nifty opened higher and remained volatile throughout the day. Participation was seen from leaders from private banks while PSU banks saw profit taking at higher levels. On the options front, maximum OI is at 32000 Call and 31500 Put. This should be the trading range for the upcoming trading sessions.
Technical Outlook on Markets:
The daily price action formed a bear candle carrying higher high-low, indicating breather at higher levels, as minor profit booking seen after recording fresh fall time high of 14244. The significant lower shadow highlights supportive efforts in the vicinity of psychological support of 14000.
Going ahead ICICI Securities expects the index to trade with a positive bias and gradually head towards 14600 in coming weeks as it is an implication of December range breakout (13778-12962) at 14594. Key point to highlight is that, over the past eleven sessions index has rallied more than 1100 points which hauled daily and weekly stochastic oscillator in overbought territory (currently placed at 85 and 95, respectively). Therefore, ICICI Securities believes subsequent rally from here on would be in zig-zag formation wherein intermittent episodes of profit booking at higher levels cannot be ruled out. However, such a temporary breather should be capitalised as an incremental buying opportunity as the broader positive structure remains intact.
Broader market endured it’s relative outperformance as both Nifty midcap and small cap indices maintained the higher high-low formation, despite weakness in the benchmark. Meanwhile market breadth remained sturdy as average 96% components of midcap and small cap indices are trading above their 200 days SMA compared to November reading of 90, signifying inherent strength and durability of the current up move
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