Today Nifty opened with an upside gap, but got support at lower levels, and it rebounded sharply towards 3700 levels, the sharp move up was extraordinary in nature, participants either has given importance to poor IIP data or China’s higher trade deficit news. We can call these up moves as pre-election rallies; tomorrow market can change its direction, which in turn will give high volatility to the Nifty. Yesterday Nifty’s MACD, one of the strong technical indicators has given a sell signal, but today again it has given a buy signal. I had seen these types of movements on MACD very few times in the past, usually it will give a major sell-offs at the end. Nifty’s volatility index had moved up sharply and PC ratio is also declining also indicative of highly volatile movements ahead. Investors should use strict stop-loss for both long and short positions.
Nifty has firm support at 3600 and 3527. Resistance will be at 3700 and 3727. If Nifty trades above it then Nifty can test 3800, 3900 and its major higher level target of 4100. On the other hand if Nifty falls below 3500 then we can expect an intermittent downtrend.
The probability of Nifty to move above 3810 during the expiry would be around 37% and its probability to move below 3471 would be only 28.25%.
Nifty has firm support at 3600 and 3527. Resistance will be at 3700 and 3727. If Nifty trades above it then Nifty can test 3800, 3900 and its major higher level target of 4100. On the other hand if Nifty falls below 3500 then we can expect an intermittent downtrend.
The probability of Nifty to move above 3810 during the expiry would be around 37% and its probability to move below 3471 would be only 28.25%.
