Nifty has been in higher top and higher bottom formation for past few month. It has briefly consolidated after every up-move and change of polarity has been instrumental in this rally. A correction in nifty has been widely utilized by bulls to enter and reap returns out of it. The momentum has been in favor for bulls as previous resistance in this rally has been acting as support later, which generally means, change of polarity. As Per OI data, Highest OI stands at 8800 and 8500 and this presents the broader range for the market in coming sessions.
In current rallies it has been majorly trend which has played its pivotal role as many indecisive candles have been formed over a period of time but Buy on dips has been the theme for this rally and same is expected to continue in coming sessions until and unless critical levels have been breached on closing basis.
Technically Nifty is above 20 Days and 50 Days SMA which suggest intermediate trend to be intact and trading above 200 days SMA also suggest a strong bullish momentum to be sustained. Nifty has been in higher top bottom formation while it is above its medium and long term moving averages. It signifies it is in bullish structure. To change the trend it has to breach 8460 on closing basis , it is hold, then we are in a bullish market.
In short term, resistance is seen at 8710 – 8840 while support is at 8550 – 8460 on downside which will change the trend if breached on closing basis. Sectorwise, Metals, Pharma and IT is looking positive in near term and mid cap stocks from auto sector should be on radar. Market Rotation is seen in sectors and PSU and FMCG may see some profit booking in near term.
(The author is CEO at Epic Research)