128 Stocks Form Open=High Scenario: Will the Market Rally Continue?

Historic Day for Indian Markets

A historic day for the Indian markets as frontline gauges NSE Nifty 50 and BSE Sensex closed at a fresh record high on Monday. This surge was driven by exit polls favoring the incumbent NDA led by BJP, which is likely to win for the third time and the fact that India’s GDP exceeded estimates, growing at 8.2% in FY24 and 7.8% in Q4FY24.

Nifty50 Index Performance

The NSE Nifty 50 index rallied over 3% and marked its highest single-day gain since February 2021. Despite it recording its sharpest single-day rally in over three years, the index has formed a candle which has an opening price almost identical to the day’s high.

The Nifty 50 index opened the session at the level of 23,337.90 and made an intraday high of 23,338.70, showing a negligible difference of one point between the open and high of the day.  This pattern, known as an open=high scenario, indicates immediate selling activity as soon as the market opened, preventing the index from rising any higher.

Broader Market

The broader Nifty500 index also had witnessed an open=high scenario, with the day’s opening level at 21,926.60 and the high of the day being the same. To understand the market state better, let’s examine the number of stocks that formed this scenario.

Open=High Scenario in Nifty500 Index

A total of 128 stocks from the Nifty500 index formed an open=high scenario. This accounts for a little over 25% of total stocks in the index.  

Stocks where we have seen open=high scenario 

1. Asian Paints
2. BDL
3. BEL
4. BEML
5. Bharat Forge 
6. Cochin Shipyard 
7. HDFC Bank
8. Hind Zinc 
9. Infosys 
10. Maruti 
11. Marico 
12. OIL

Interpretation for Market Participants

The fact that a large number of stocks opened at their highest price of the day and then dropped suggests that sellers dominated. This can be an indication of a bearish sentiment. With 128 out of 500 stocks showing the pattern of open=high, it affects more than a quarter of the index stocks, signaling widespread pressure in the stock from the opening levels rather than isolated cases.

How do Market Participants Take this Data?

• Caution for Long Positions
• Monitoring Support levels
• No over-leveraged position

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making related decisions.