INSUBCONTINENT EXCLUSIVE:
The domestic equity market on Thursday traded on expected lines as weekly options expiry dominated the trade
The 9,000 level, which had the maximum Call open interest, prevented Nifty from going beyond this point
After witnessing a negative start, the market recovered from the morning lows, but did not see any runaway rally
While continuing to resist key levels, the headline index ended with a gain of 67.50 points or 0.76 per cent at 8,992.80.
Volatility cooled
down considerably as India VIX declined 7.32 per cent to 49.10
The price action of Nifty against 9,050-9,100 will remain crucial over the coming sessions
to see a tentative start, with 9,050 and 9,115 levels acting as immediate resistance
Support may come in at 8,930 and 8,850
Any downside move is expected to make trading range wider than usual over the coming sessions.
The Relative Strength Index (RSI) on the
daily chart was at 46.50 and stayed neutral, showing no divergence against the price
A white body was formed on the daily chart.
As per pattern analysis, Nifty has remained in an area formation, wherein it has attempted to
mark a base for itself by making a higher bottom near the 8,000 level
The index has strong resistance in the 9,050-9,100 zone and will have to move past this area to continue with the technical pullback.
Unless
Nifty moves past and sustains above 9,050-9,100, it will continue to remain vulnerable against profit taking at higher levels
The index has made a higher bottom, but it is yet to break out of the current wide trading zone.
We would recommend traders to avoid
significant exposures on the long side unless the index moves past the mentioned zone convincingly
As long as the market remained in the current trading range, profit on either side should be vigilantly protected.
(Milan Vaishnav, CMT,
MSTA, is a Consulting Technical Analyst and founder of Gemstone Equity Research - Advisory Services, Vadodara
He can be reached at milan.vaishnav@equityresearch.asia)
