Post market comment by Mandar Bhojane, Research Analyst, Choice Broking
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On May 9, benchmark indices experienced a significant downturn, with the NSE Nifty 50 dropping below 22,000 and the BSE Sensex plummeting by over 1,062 points. Both indices started the day on a downward trend, experiencing an intraday decline of over 1.5 percent.
This marks the fifth consecutive day of sell-offs for the headline indices. Several factors, including the ongoing Lok Sabha elections, lackluster Q4 results for the 2024 season, and rising crude oil prices, have contributed to this prolonged downturn.
On the daily chart, Nifty failed to sustain above the 22,300 level, experiencing a sharp decline of almost 436 points, or 1.95%, from the day's high. It closed below 22,000, settling at 21,968.15. A strong bearish candle was formed on the daily chart with significant volume, indicating substantial selling pressure. Now, 21,800 and 21,700 are identified as major support levels for Nifty. On the flip side, if Nifty reverses strongly from these support levels and closes above 22,000, it may further ascend to 22,200 and 22,300 levels.
Except for Nifty Auto, all sectors witnessed a decline. Nifty Oil & Gas was the top loser, falling by 3.2 percent, followed by Nifty Metal and FMCG indices, which dropped by 2.9 percent and 2.5 percent, respectively. Nifty Pharma and Realty indices also experienced a 2 percent decline each. Among gainers, Nifty Auto rose by 0.8 percent.
Analysis of Nifty put options reveals a concentration of Open Interest (OI) at the 21,500 level, indicating potential support. On the Call side, significant OI concentrations are observed at the 22,200 and 22,300 levels, nearing all-time highs.
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