NIFTY50 shrugs off bearish signal, but volatility looms
Upstox
3 min read • Updated: May 17, 2024, 6:34 PM
Summary
On the weekly chart, the NIFTY50 index defied the bearish engulfing pattern that was formed last week. The index failed to provide the follow through of the potential bearish reversal and recovered most of the previous week's losses. However, a contrary signal emerged as the Volatility Index also surged 7%, indicating a potential increase in volatility in the week ahead.
After a flat start, markets extended Thursday's gains to end the range-bound session on a positive note. The NIFTY50 index gained 0.2% and closed at 22,466, while the SENSEX advanced 0.3% to end the day at 73,917.
Except for IT (-0.8%) and Pharma (-0.1%), all the major sectoral indices closed in green. Automobiles (+1.7%) and the Metals (+1.6%) witnessed buying interest.
The technical structure of the NIFTY50 index displayed strength for the second day in a row. After forming a bullish hammer on the daily chart on 16 May, the index closed above the high of the reversal pattern, indicating further strength. The index also negated the bearish engulfing pattern formed the previous week by failing to provide a follow through price action.
However, with the India VIX (volatility index) still hovering around 20, traders are advised to remain vigilant for sharp price swings as the index approaches its immediate resistance zone around 22,800.
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Top gainer and loser in NIFTY50: Mahindra and Mahindra (+5.8%) and TCS (-1.5%)
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The broader markets continued their upward momentum. The NIFTY Midcap 100 hit a fresh all-time high and the Smallcap 100 index rose 1.6%.
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Top gainer and loser in NIFTY Midcap 100: CG Consumer (+15.1%) and Honeywell Automation (-5.2%)
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Top gainer and loser in NIFTY Smallcap 100: Mazagon Dock Shipbuilders (+12.1%) and Shilpa Medicare (-4.3%)
Key highlights of the day:
⭐Vedanta jumped 2% after the company's board approved raising up to ₹8,500 crore through equity issue or FPO. This comes after the company plans to reduce its debt of ₹56,300 crore.
⚡Dixon Technologies jumped over 8% after the company's Q4 FY24 net profit rose 20% to ₹97 crore, led by strong growth in its mobile phones and electronic manufacturing services division.
📲Vodafone Idea (+0.7%) was in focus after the company's CEO announced that the operator's 5G services will be rolled out in the next 5 months..
Top traded futures contracts
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4 trading insights from NIFTY 200🔍
📉Open = High (Bear power): Mphasis, SBI Life, HCL Tech, Britannia and Hindustan Unilever
📈Open = Low (Bull power): Dixon Technologies, Mahindra and Mahindra, Grasim Industries, Steel Authority of India (SAIL) and Max Financial Services
🏗️Fresh 52 week-high: Mazagon Dock Shipbuilders, Dixon Technologies, Mahindra and Mahindra, IRCTC and Container Corporation of India (CONCOR)
⚠️Fresh 52 week-low: N/A
And that's it for today's F&O recap! Get the full scoop on market trends and curated scans at https://pro.upstox.com/
See you on Tuesday!