Last week, Nifty faced resistance around 5370 (made a high of 5378) and closed at 5322.90 (just below 20SMA, 50SMA and 100SMA which are at 5323, 5330 and 5323 now). Due to truncated week, some profit booking were seen. Watch 5267 and 5250 level, above which longs are safe. Below 5250, Nifty may hit 5130 and 5080 on the downside. However, if Nifty able to cross 5380 and 5400 level, we may see 5600 in this expiry. Today, Nifty may trade between the range of 5267 and 5380.
On daily chart, some bearish patterns (ICELAND REVERSAL PATTERN & potential EVENING STAR PATTERN) are developing that may cause upside LIMITED. It is better that every rally may be utilized to exit longs, if any, and/or Nifty creating short position. Failing to hold 5250 level will result 5080/5050. However, if Nifty manages to close above 5420/5440 on daily/weekly basis, the target will be 5600.
From options data,,highest options base has been shifted to 5000 put and 5600 calls. However, since near the money strikes of 5200 put and 5400 call also strengthened with decline in volatility, it is expected that Nifty may trade in a range of 5200-5400 for the time being. In any case, breaching of this range may lead 150-200 points in Nifty on directional bias.
DISCLAIMER: BEING A TRADER, I MAY HAVE SOME VESTED INTEREST.
