Indian markets on Tuesday witnessed exactly opposite to what it saw in the prior two trading sessions. On the second trading session of the week, Nifty opened with a gap-up and extended its gains with Sensex hitting a new lifetime high and Nifty almost revisiting its previous all-time highs. However, in the latter half of the trading session, there was a change in fortune as the market trimmed the bulk of its gains and settled near the day’s low.
Among the sectoral indices, Nifty Auto surged 1.34 per cent while Nifty IT advanced 0.55 per cent. On the other hand, Nifty Realty, Nifty Bank, and Nifty Private Bank ended down in the range of 0.35 per cent to 0.68 per cent. Interestingly, India VIX cooled off by 2.14 per cent and slipped below the 15-mark.
Technically, after opening with a gap-up, Nifty filled the opening upside gap by the end of the day itself. It almost tested the previous high, which was just 6 points away. During the day, it broke the channel resistance in the first hour. However, later, it made lower highs & lower lows throughout the day and closed near its day's low.
Though Nifty closed in the positive territory, yet the follow-through day is not convincing enough to signal the continuation of upmove. Nifty took support at immediate short-term moving average i.e. 5-EMA. Furthermore, the ATR continued to surge and as we are nearing June derivative series expiry day, it is expected to move further up. Also, as the volatility remains near its lower level in recent times, there are high chances that we could see it surging on the upside.
The level of 15,900-15,905 is a visible resistance in the near term and as long as Nifty does not close above this zone, there is a high possibility that the index may consolidate. On the downside, the level of 15,600 is an immediate support, followed by 15,500 level.