In the world of stock markets, the Nifty index holds a special place. With its recent feat of closing at a record high, Nifty has been a topic of significant discussion among traders and investors. At the current market price (CMP) of 20070, Nifty has not only regained the psychological level of 20000 but also showcased impressive strength. This article dives deep into the world of Nifty, exploring its recent performance, options data, and strategies for traders.
Nifty’s Bullish Surge
According to Mr. Oberoi, Nifty’s recent ascent to the CMP of 20070 is nothing short of remarkable. It’s a clear indicator of bullish sentiment in the market. Traders and investors have watched in awe as Nifty continued to climb, seemingly unfazed by external factors. The achievement of crossing the 20000 psychological level is significant, and it reflects the confidence of the bulls in the market.
Options Data Insights
To gain a more comprehensive understanding of Nifty’s current situation, let’s delve into the options data:
Strong Support at 20000 Calls
The Highest Open Interest (OI) on the calls side at 20000, with 1.24 crores, serves as a robust support level for Nifty. This indicates that a significant number of traders are betting on Nifty staying above the 20000 mark. It’s a clear vote of confidence in the market’s upward movement.
Mild Resistance at 20100 Puts
On the flip side, we observe mild resistance at 20100 puts, where the Highest OI stands at 1.19 crores. While not a formidable barrier, it suggests that some traders are hedging their bets by purchasing puts at this level. However, it’s worth noting that this resistance is not strong enough to deter Nifty’s bullish momentum.
Short Covering Potential
An intriguing aspect to watch is the possibility of short covering. If Nifty manages to cross the 20120 levels, it could trigger a cascade of short covering. Traders who had previously bet against Nifty’s rise might be forced to buy back their positions, further fueling the upward movement.
Buy on Dips Strategy
For traders looking to capitalize on Nifty’s bullish trend, a ‘Buy on Dips’ strategy is worth considering. This strategy involves purchasing Nifty when its price experiences temporary dips, with an eye on the target range of 19900-19950. Such dips can be seen as buying opportunities within the overall uptrend.
Banknifty’s Impressive Performance
While Nifty’s performance steals the spotlight, Banknifty is not far behind. Currently trading at a CMP of 45909, Banknifty managed to close almost 400 points higher after a choppy session. This remarkable surge was propelled by prominent PSU banks like SBIN, Canara Bank, Bank of Baroda, and Axis Bank.
Mild Resistance at 46000 Calls
In Banknifty’s options data, we find mild resistance at 46000 calls with an impressive 14.75 lakhs in OI. This level, while not a significant hindrance, signifies cautious optimism among traders.
Strong Support at 45500 Puts
On the downside, Banknifty enjoys strong support at 45500 puts, boasting a robust 15.91 lakhs in OI. This level has acted as a reliable safety net for Banknifty, reassuring investors during turbulent times.
3 Stocks to Watch on 14th Sept
Apart from index performance, individual stocks often steal the limelight. Here are three stocks to keep a close eye on for September 14th:
- Bharti Airtel (CMP 915.15): This stock recently closed above its strong resistance zone of 905, signaling potential for immediate gains. Positionally, Bharti Airtel could reach levels of 980-1000 in the coming days, with a stop loss set at 880.
- Tata Consumer (CMP 889.3): Tata Consumer’s very strong closing above 884, a recent high, and an RSI crossing 62 indicate positive momentum. Traders can anticipate levels of 940-950 in upcoming sessions, setting a stop loss at 855.
- Grasim (CMP 1933): Trading at an all-time high, Grasim demonstrates remarkable strength. Expectations are set for Grasim to reach 2100 levels in the coming days, with a recommended stop loss at 1875 (closing basis).
Frequently Asked Questions
Q: What is Nifty’s current CMP, and why is it significant?
A: Nifty’s current CMP is 20070. This level is significant as it marks the regaining of the psychological level of 20000, signifying bullish sentiment in the market.
Q: What is short covering, and how can it impact the market?
A: Short covering refers to the buying of shares by traders who had previously sold them short (betting on a price decline). When short covering occurs, it can lead to a rapid increase in the stock’s price, adding to bullish momentum.
Q: What is the ‘Buy on Dips’ strategy, and how does it work?
A: The ‘Buy on Dips’ strategy involves purchasing a stock or index when its price experiences temporary declines within an overall uptrend. This strategy capitalizes on buying opportunities during market corrections.
Q: How can traders use options data to make informed decisions?
A: Traders use options data to gauge market sentiment and identify support and resistance levels. High Open Interest at a particular strike price can indicate strong support or resistance, helping traders make informed trading decisions.
Q: What are PSU banks, and why are they relevant to Banknifty’s performance?
A: PSU banks, or Public Sector Undertaking banks, are government-owned banks in India. They play a crucial role in Banknifty’s performance because their performance can significantly impact the index due to their large market capitalization.
Q: What is the significance of setting stop loss levels in stock trading?
A: Setting stop loss levels is vital in stock trading to limit potential losses. It serves as a safety net, automatically selling a stock when it reaches a predetermined price, protecting traders from excessive losses.
Disclaimer: These insights are of an analytical nature and are not provided by a SEBI-registered analyst. They should not be considered as buy/sell recommendations. Before making any decisions related to stocks or investments, we strongly advise you to consult with your financial advisor. Refersms holds no liability for any potential losses incurred based on these insights.