By Ruchit Jain
Nifty started the day on a positive note and witnessed a positive momentum in the initial couple of hours to surpass 15600 mark. However the index sold off sharply, wiped out all the gains and even breached the previous day’s low. But it was not done yet, it again recovered sharply in the later part and ended the volatile session above 15550 with gains of almost a percent.
The weekly expiry day was indeed very volatile for intraday traders as sharp moves were seen on both sides of the trade. This clearly indicates a tug-of-war between bulls and bears as the market is trying to make a comeback post the recent correction.
On the daily charts, the daily readings are still in the oversold zone and have to cool-off before the next leg of the corrective phase. Hence, the index is attempting a pullback move within a corrective phase. In the near term, we expect the index to retrace the recent down move from 16800-15180 and 38.2 percent retracement of this correction is placed around 15800.
Amongst other indicators, the ’20 DEMA’ is around 15880 and the 50% retracement mark is around 16000. Until Nifty breaks the recent swing low of 15180, we expect the index retrace towards the above mentioned resistances. As of now, the previous support zone of 15560-15700 which was breached is acting as a resistance since last three sessions, but given that the market breadth was positive and certain sectors and stocks are also showing signs of a pullback from their oversold territory, we may see Nifty breaking the above barrier soon. Hence, till 15180 is intact, short term traders should look for stock specific buying opportunities and trade with a positive bias.
(Ruchit Jain, Lead Research, 5paisa.com. Views expressed are the author’s own.)