Mr. Mustafa Nadeem, CEO, Epic Research
Nifty rebounded taking support from its previous swing lows along with short covering ahead of expiry. A rebound was seen as buying emerged at lower levels in various sectors such as Banks, Energy, IT, Financials and PSUs. There was also some buying which was seen in small cap and midcap.
As Nifty goes to expiry tomorrow, It was a decisive day for bulls with Index sustaining the supports placed at 11600. In the early morning session, we did see some consolidation but buying emerged as options data pointed to addition in 11600 PE. the range for the market which was large of 11600 - 11700 is now pointing to somewhat between 11650 - 11750.
This is a consolidation phase which we are seeing in Nifty and given that the trend is positive we should utilize the dips for short term Only a close below 11580 would prove a point and help bears. Till then we remain a buyer.
There are some factors that we are seeing contributing to the distortion of bullish sentiments and an important one is VIX which is above 23 levels and sustaining. While it has risen over 40% in the last few weeks we are also seeing elevated crude oil prices. Both these are putting a shady picture of Index in the short term as upside may remain capped.