NIFTY: What is Next?

Nifty has been experiencing a correction after hitting a top of 9119.20 during the month of March last year. This correction has occurred in a channelized manner and today nifty has witnessed nice recovery from 7241.50 after testing support line of this bearish channel. However, there is no evidence of bottom on chart and bulls need to establish a move above 7500 to claim their presence. Index is staying below 5 days exponential moving average from last few days that suggests accelerated down trend. MACD indicator has been staying below center line and still it’s loaded with bearish momentum that remains a supporting factor for NIFTY bears. However, 14 periods daily RSI is testing oversold territory but it is also staying below its 9 periods moving average that keeps on going down trend intact. 2 Fibonacci projections are converging near 7220-7187 zones. These are the areas where NIFTY might get support. If nifty manages to spend considerable time below 7180 zones then down trend might extend towards 6800 zones otherwise a potential bottom can be expected around 7180-7220 zones for a jump towards 7400-7470 zones. Recovery and stability above 7600 zones needed to confirm a short term bottom and trend reversal otherwise this index will remain under bearish threat with ceiling at 7600 and every rise will be a selling opportunity whereas stability below 7180 will open the doors for 7000-6800 zones.

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#NIFTY #INDEX currently trading at 13438, down by 90 from previous close. Today index has opened gap down and taken out the low placed yesterday at 13449 triggering primary weakness in market for the day. Immediate support is now placed at 13390, retest to this level can’t be ruled out but stability below 13390 will result in to further weakness and then attempt towards 13350-13310 zones can’t be ruled out. Key support will be at 13300 and further stability below that level will bring more weakness. Resistance is now placed at day high which stands at 13488, any sustained move (Less likely) above that level will bring some relief to bulls and then attempt towards 13540-13590 can be seen. On #option_chain heavy #call_writing is being done at 13500-13600 strikes where as short covering is visible in 13450 and 13500 puts whereas longs build up seen in 13400 puts with high volume. Based on current #OI position level of #option_pain stands at 13400 thus based on current data at 10:52AM...

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