Indian equity benchmarks opened higher on Wednesday, with Nifty 50 rising 0.23% to 24,044.50 and Sensex advancing 0.35% to 77,080.09 as reported by LiveMint. The rally has been strong over the past three sessions, with Nifty 50 gaining 3.6% and Sensex rising 4%, driven largely by a sharp decline in oil prices following the announcement of a US-Iran peace agreement. Market breadth remained positive, with 15 of the 16 major sectoral indices trading in the green, while broader markets also participated with small-cap and mid-cap indices gaining 0.4% and 0.3% respectively. According to ICICI Securities analysis, the highest call base is at 24,000 on a cumulative basis, while 23,500 has the highest put base, indicating a range of 23,500-24,000. The first target for Nifty 50 is 24,500 with a positional target of 25,000 until it doesn't close below 23,500 levels.
Brent crude futures were largely unchanged at around $79 per barrel after plunging 5.1% in the previous session to their lowest closing level since 2 March, according to LiveMint. The sustained decline in oil prices has eased inflation concerns and improved the outlook for oil-importing economies such as India. The India VIX has fallen sharply to 13.40 levels, reaching levels from where it began its upward journey when war news broke out, indicating that the VIX has fully priced in the deal with no uncertainty until it surpasses 17.50 levels. International crude oil prices have also corrected and are trading significantly lower than their recent highs, indicating that the panic is over. Bond yields, both internationally and domestically, have softened, indicating a smooth upside in equity markets.
Jay Thakkar of ICICI Securities recommends Dixon Technologies futures in the range of ₹12,250-12,280 with stop loss below ₹11,940 and targets of ₹13,300 and ₹13,700. For Bharat Electronics (BEL) futures, he suggests buying in the range of ₹405-412 with stop loss below ₹395 and targets of ₹425 and ₹435. Additionally, he recommends Container Corporation of India futures in the range of ₹460-470 with stop loss below ₹454 and targets of ₹480 and ₹500. According to the latest technical analysis, Dixon has taken off its multiple swing resistances and with that there has been short covering witnessed as well in the futures segment, indicating a short-term uptrend. The max pain is at 11,800 and the stock is trading well above those levels, with good put additions right from 12,000 strikes all the way to 11,000 strike indicating support at the lower levels. For BEL, the stock has fallen until its previous monthly swing lows and looks too oversold in the near term, with the highest call base at 420 and good additions in puts at 400, 410 and 420 strikes.
According to ICICI Securities analysis, the Nifty 50 has closed in positive territory for the third consecutive day and is likely to witness a straight move to 24,500 above 24,000-24,100 levels. The highest call base is at 24,000 on a cumulative basis, while 23,500 has the highest put base, indicating a range of 23,500-24,000. The overall market breadth has been improving with Nifty Midcap and Nifty Smallcap participating well in the upmove, though there has been some profit booking in Nifty Bank near 24,000 levels. Indian markets have witnessed significant outflows from FIIs, both in the equity cash segment and in their aggressive short positions in the Index futures. From these extreme levels, it is likely to reverse, which will help our equity markets bounce back from current levels. The India VIX range is expected to be 12-17 levels going forward, with no uncertainty until it surpasses 17.50 levels.
