The Indian equity markets continued to consolidate; the NIFTY opened on a weaker than expected note but recouped from the low point of the day to end with a negligible loss. The markets saw a weak start to the day; the Index opened more than 100 points lower. However, the low point was also marked in the early seconds of the trade as the NIFTY managed to crawl back inside the positive territory in the first hour of the trade. It managed to mark the high point in the late morning session after which it again drifted in the negative territory. It continued to trade in the negative zone with very limited losses in the end; the headline index closed with a minor loss of 22.90 points (-0.13%).
The markets also had the weekly options expiry; there was the highest Call writing seen at 17250 levels throughout the day. This prevented the index from settling above this point. The weekly options data for the next week which is also a monthly expiry shows upside moves likely to get capped at 17500 levels as that is the point where the maximum Call Open Interest exists. With the maximum Put OI at 17000, the coming also has a similar trading range of 17000-17500 getting defined through interpretation of the options data. Also, the technical charts show the 100-DMA which is placed as 17344 a major resistance on a closing basis. This also makes the zone of 17350-17500 a crucial and stiff resistance zone for the NIFTY over the coming days.
Friday can see the levels of 17300 and 17360 acting as potential resistance points. The supports come in at 17150 and 17035 levels.
The RSI stands at 55.21 while staying neutral against the price. The daily MACD is bullish and above the signal line. Apart from a white body that emerged on the candles, no other formations were seen.
In the previous technical note, the zone was 17000-17500 was mentioned as a trading zone for the NIFTY in the most immediate near term. This would mean that a sustainable directional bias will be established only after the NIFTY moves past 17500 convincingly or it slips below 17000. Until this happens, we will see the markets oscillating in a range-bound manner. It is recommended to continue limiting the exposures and stay highly selective in approach with vigilant protection of profits at higher levels. Unless the NIFTY is above 17500, each move that takes the markets higher is likely to be encountered with profit-taking bouts.
This was first published by The Economic Times.
Milan Vaishnav, CMT, MSTA
Consulting Technical Analyst
Member: (CMT Association, USA | CSTA, Canada | STA, UK) | (Research Analyst, SEBI Reg. No. INH000003341)
