The Nifty 50 index regained nearly everything it lost on Monday during the second day of the week, taking it back to almost the same levels as last Friday's close. The index is back above the 18,800 mark and is now 70 points away from its all-time high of 18,887.6. With sentiments around Prime Minister Narendra Modi's US visit at a high, it will not be a surprise if the index manages to surpass those levels this week itself.

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It was not smooth sailing though for the index on Tuesday as it recovered nearly 160 points from the day's low. The Nifty 50 took support at the 18,650 mark and reversed its course during the second half of the trading session, supported by buying in IT, Metal, and Banking stocks.

"The near-term uptrend on the Nifty 50 remains intact," said Nagaraj Shetti of HDFC Securities, who expects the index to reach levels of 19,100 - 19,200 in the next one to two weeks. "Immediate support for the index is at 18,650 levels," he said.

Shrikant Chouhan of Kotak Securities observed that the Nifty 50 has made a double-bottom formation on its intraday charts, which indicates the continuation of the upward momentum in the future. "For the day traders, 18,750 will be the trend deciding level, above which, the index could rally to 18,900 - 18,925," he said. Below 18,750, the index can dip back to 18,650 - 18,620.

Some last hour buying managed to save the Nifty Bank some blushes as the index ended higher by over 100 points. However, what may be a sign of concern is that Tuesday's intraday high of 43,823 was the first instance since May 25, that the index could not scale the mark of 44,000 intraday. Even the intraday low of 43,345 was the lowest in over a month. The Nifty Bank index has now closed below 44,000 in eight out of the last nine trading sessions.

Kunal Shah of LKP Securities believes that the Nifty Bank is locked in a range of 43,400 - 44,000 and it needs a sustained break on either side for a directional move. "As long as the support level of 43,400 is held, a buy-on-dips approach is suggested," he said. Above levels of 44,000, Shah expects a sharp short covering on the Nifty Bank towards levels of 45,000.

The 50-Day Exponential Moving Average of the Nifty Bank index, which is placed at levels of 43,270 is likely to act as a strong support for the index, said Ashwin Ramani of SAMCO Securities. However, the index needs a strong close above the 44,000 mark to attract further buying interest.

The IT index was a major contributor to the recovery in the Nifty 50 index on Tuesday as it emerged as the top sectoral gainer. The index has now gained for two days in a row and has added nearly 400 points during this period. Nine out of the ten index constituents ended higher on Tuesday led by HCLTech, which gained nearly 3 percent.

"We are avoiding companies that are largely dependent on exports as we are underweight on IT. That has got recently validated by TCS or Infosys results, which reflected project delays or cancellations and even lower growth guidance. So net-net we are more domestic-centric focused at this point of time," Dhiraj Sachdev of Roha Asset Managers said.

What Are The F&O Cues Indicating?

Nifty 50's June futures continue to see Open Interest shedding. The futures shed 2.6 percent or 2.63 lakh shares in Open Interest and are now trading at a premium of 48 points, compared to 84.75 points earlier. On the other hand, the Nifty Bank index saw addition of 1.1 percent or 24,625 shares in Open Interest. Nifty 50's put-call ratio was back above 1, ending at 1.16 from 0.98 on Monday.

Manappuram Finance, Tata Chemicals and Zee Entertainment are the three stocks that are out of the F&O Ban list. Hindustan Copper and BHEL are the two new additions to the list, while India Cements, Indiabulls Housing Finance, Delta Corp, Hindustan Aeronautics and L&T Finance Holdings continue to remain in the ban period.

Nifty 50 on the Call side for June 22 expiry:

As the Nifty 50 rebounded on Tuesday from its intraday lows, call strikes at higher levels saw Open Interest shedding. However, strikes beyond its record high saw some addition in Open Interest.

Nifty 50 on the Put side for June 22 expiry:

The same 18,800 and 18,700 strikes that saw shedding on the call side, saw Open Interest addition on the put side. Lower strikes at 18,650 and 18,750 put also saw addition in Open Interest.

Lets take a look at the stocks that added fresh long positions on Tuesday, which means an increase in price and Open Interest:

Lets now take a look at the stocks that saw fresh short positions on Tuesday, which means a decrease in price but increase in Open Interest:

Some stocks also saw short covering on Tuesday, which means an increase in price but decrease in Open Interest:

Here are the stocks to watch out for in today's session:

Shriram Finance: Sources told CNBC-TV18 that Piramal Enterprises plans on selling its entire stake in the company via block deals. More details here.

HDFC Life Insurance: Competition Commission of India approves acquisition of additional stake by HDFC in HDFC Ergo and HDFC Life.

Pidilite: To manufacture Litokol and Tenax products from Italy in India

Shilpa Medicare: To consider raising funds via rights issue on June 23.

HDFC AMC: SBI Mutual Fund, Smallcap World Fund, Societe Generale were among the key buyers in the block deal where Abrdn sold stake on Tuesday. The stock had its biggest single-day gain on record.

Cyient: IPO of demerged DLM business to open on June 27 and close on June 30.

What Are The Global Cues Indicating?

Most Asian markets have opened lower on Wednesday mirroring moves from Wall Street overnight. The Nikkei 225 is down 0.4 percent, while the Topix is down 0.2 percent, ahead of the release of BoJ's minutes of the last meeting. The Kospi in South Korea is down 0.3 percent but the Kosdaq is bucking the trend, trading 0.4 percent higher.

All major indices in the US fell overnight as the markets resumed trading after the Juneteenth holiday. Both the Dow Jones and the S&P 500 fell 0.7 percent each, while the Nasdaq declined 0.2 percent.

The Singapore (SGX) Nifty futures, which are an early indicator of how the Indian markets will begin trade are currently little changed at 18,883, thereby indicating a subdued start to the trading session.

Foreign investors were net sellers in the cash market on Tuesday, while domestic investors were net buyers. The numbers though, are influenced by a slew of block deals that took place on Tuesday, including that of HDFC AMC.

SAMCO's Ramani continues to believe that the 18,900 level will act as a strong resistance for the Nifty 50 due to the heavy call writing seen in that strike.

However, Rajesh Bhosale of Angel One advises traders to remain upbeat and continue with their strategy of buying into every intraday dip. He expects the index to cross its all-time high and head towards the psychological level of 19,000. 18,550 - 18,600 on the downside will be key support levels, including Tuesday's low of 18,660.

First Published:Jun 21, 2023 5:56 AM IST