However, from late morning until close, Nifty surged and remained in a secular uptrend. It rose over 300 points from the opening lows and went on to end the day with a strong gain of 285.90 points, or 3.17 per cent.
There is weekly options expiry as well as monthly derivative series expiry on Thursday. So Wednesday’s session was aided by both weekly and monthly derivatives expiry dynamics. Nifty’s behaviour against the 9,300 level will be extremely crucial. The strike price 9,500 has the concentration of the maximum Call open interest followed by 9,300 level. If Nifty is able to stay above 9,300 level, it may attempt an extension of the up-move. If it slips below 9,300, then this level may act as a resistance point.
On Thursday, Nifty will face resistance at the 9,365 and 9,425 levels, while supports will come in at 9,260 and 9,175 levels. The trading range is expected to remain wider than usual.
ET CONTRIBUTORS
The Relative Strength Index (RSI) on the daily chart stood at 53.35; it made a fresh 14-period high, which is a bullish signal. However, the indicator did not show any divergence against price. The daily MACD has turned positive. It remains bullish and trades above the signal line. A strong white body emerged on the candles. This indicated a strong upward bias that persisted throughout the session.
Volatility continued to decline as indicated by volatility index INDIA VIX, which came off modestly by 0.63% to 31.2775. The market may attempt an extension of the up-move or may consolidate at higher levels. In any case, Nifty’s action against the 9,300 level would be crucial for tomorrow. It would be essential for Nifty to keep its head above the 9,300 mark. Otherwise, some profit taking may creep into the market. We recommend chasing the up-move, if there is any, in a cautious way and protecting profits at higher levels.
(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])
