- Global cues are fueling a fresh rally in Nifty 50 and Sensex.
- Option open interest points to a 25,600‑26,400 range, with strong call writing at 25,900‑26,000.
- Bank Nifty is poised to test the 61,250 level if it holds above 60,500.
- Three high‑conviction stocks – Shriram Finance, Sona BLW, Titan – offer clear entry/stop‑loss setups.
- Bull and bear scenarios are laid out, so you can act confidently whichever way the market moves.
You’re missing the next 2% upside in India’s market – and it’s staring you in the face.
Why Nifty 50’s Momentum Matches Global Bullish Waves
Overnight, Asian and US equity futures posted solid gains, nudging the Gift Nifty higher and setting the stage for a strong open on the Indian exchange. The Nifty 50 closed yesterday at 25,867.30, a 0.68% rise, while the Sensex added 0.58% to finish at 84,065.75. Those numbers are more than just statistics; they signal that the market is feeding off global risk appetite, which often translates into a multi‑day rally for front‑line indices.
Historically, a three‑day streak of positive closes in the Indian market coincides with a 4‑6% gain in the subsequent week, provided macro fundamentals stay supportive. With inflation easing and foreign inflows steady, the odds are tilting in favor of continued upside.
What the Option Open Interest Reveals About the 25,600‑26,400 Trading Corridor
Derivatives data from Motilal Oswal’s Chandan Taparia shows the largest call OI at the 26,000 strike, followed closely by 25,900. On the put side, the bulk sits at 25,800 and 25,700. In plain terms, traders are stacking calls just below the current index level while hedging with puts a few points lower.
This “call‑write‑put‑write” pattern creates a natural support zone around 25,600‑25,700 and a resistance ceiling near 26,100‑26,400. When call writers dominate, the market can trade sideways for weeks, but a breach above 26,100 often triggers a short‑cover rally as the written calls get exercised.
Technical jargon made simple:
- Open Interest (OI) – the total number of outstanding contracts; high OI at a strike indicates strong interest.
- Call writing – selling call options, which caps upside unless the underlying breaks the strike.
- Put writing – selling puts, which provides a floor of support.
Bank Nifty’s Resilience: Technical Signals Pointing to 61,250
Bank Nifty closed at 60,669.35, up 0.91%. The daily candle showed a small bearish body but a pronounced lower wick, suggesting that buyers stepped in near the 60,500 zone. Taparia notes that as long as the index stays above 60,500, the next logical targets are 61,000 and then 61,250.
Comparing with the last quarter, every time Bank Nifty defended the 60,500 level it went on to rally 2‑3% in the following month. That pattern is reinforced by rising volume and a narrowing spread between the 20‑day and 50‑day moving averages, a classic sign of strengthening momentum.
Sector Lens: How Financials, Metals, and Consumer Durables React
Financials are the engine of today’s rally. Shriram Finance, a mid‑cap lender, is breaking out of a “pole‑and‑flag” formation, indicating a continuation after a consolidation phase. Metals, represented by Sona BLW Precision Forgings, are benefitting from a symmetrical triangle breakout, reflecting higher demand for steel in infrastructure projects.
Consumer durables, exemplified by Titan Company, have found support at the 100‑day exponential moving average (DEMA). The ADX (Average Directional Index) turning up and the +DI crossing above the –DI confirm a bullish trend, implying that discretionary spending is still resilient despite a slightly higher CPI.
Stock Picks That Could Outperform the Rally
Shriram Finance – Target ₹1,135, Stop‑Loss ₹1,030. The stock has breached its all‑time high with a strong bullish candlestick. MACD (Moving Average Convergence Divergence) has just crossed upward, confirming momentum.
Sona BLW Precision Forgings – Target ₹575, Stop‑Loss ₹505. Volume spikes accompany the price retesting its breakout, while the RSI (Relative Strength Index) climbs above 55, indicating rising buying pressure without being overbought.
Titan Company – Target ₹4,475, Stop‑Loss ₹4,140. The stock bounced off its 100‑day DEMA, and the ADX above 25 signals a strong trend. The +DI staying above –DI adds further conviction.
Investor Playbook: Bull vs Bear Scenarios
Bull Case
- Maintain a long position in Nifty futures if the index breaks above 26,100 on strong volume.
- Buy Shriram Finance and Titan on dips to their respective stop‑loss levels; set trailing stops once targets are half‑way achieved.
- Consider adding Bank Nifty call options at the 61,000 strike to leverage the upside.
Bear Case
- If Nifty falls below 25,500, shift to protective puts or reduce exposure to high‑beta stocks.
- Exit Shriram Finance and Sona BLW if they breach their stop‑loss thresholds; re‑enter only after a clear reversal pattern.
- Watch the put OI at 25,700 – a surge could signal a short‑term correction.
Regardless of the direction, the key is to align your risk management with the technical zones highlighted above. Stay disciplined, watch the OI flow, and let the data guide your entry and exit points.