The 50-pack opened positive and maintained modest gains as it oscillated in a capped range. The index remained range-bound, but made a remarkable recovery in the second half of the session.
The index managed to go well past the 9,000 mark and stayed there till close. The headline index ended the session with a decent gain of 187.45 points, or 2.11 per cent.
Expiry of weekly options is going to dominate Thursday’s session. Options data is throwing up some exciting figures, which showed near-similar and maximum Call open interest concentration at 9,100, 9,200 and 9,300 strikes. This means Nifty is facing strong resistance at either of these levels. Also, this covers the 50-DMA, which is also a major resistance point on a closing basis; and it currently stands at 9,154.
The Relative Strength Index (RSI) stood at 47.09; it remains neutral and does not show any divergence against price. The daily MACD stays bearish, as it trades above the signal line. A Bullish Engulfing Pattern has occurred on the candles. However, the potency of such a formation may be doubtful as it has emerged just below a major resistance point, which exists at the 50-DMA.
ET CONTRIBUTORS
Pattern analysis does not point to any major change in Nifty trajectory. The current setup remains bearish after the Nifty fell out of the Rising Wedge formation. Having said that, the short-term indicators remain slightly oversold, and this may result in some more pullback. However, it is unlikely to result in any significant change in trend.
All in all, there are possibilities of some follow-up pullback continuing in the initial trade, which may extend itself a little bit. As a short-term trader, one may chase the extension of the uptrend, if it happens. However, at the same time, it would not be advisable to get complacent with the rally, and it is strongly advised to keep protecting profits at higher levels. A cautiously positive approach is suggested for the day.
(Milan Vaishnav, CMT, MSTA, is a Consulting Technical Analyst and founder of Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at [email protected])
