Nifty likely to rally if it holds above 18000; look for buying opportunities on intraday dips to pocket gains

Nifty likely to rally if it holds above 18000; look for buying opportunities on intraday dips to pocket gains

By Ruchit Jain

The volatility in our markets finally seems to have cooled-off in last few sessions after the large swings seen around the Budget session. The India VIX has declined to around 13 again indicating much of the negative news has now been factored in. The correction in the Adani group stocks dampened the market sentiment which had reached the extreme end caused by excessive pessimism. Such sentiments usually lead to bottom in the corrective phase and the markets seem to have formed such bottom on the budget day.

On the other hand, the Client section which includes the retail traders and the HNIs have been trading with a positive bias with over 60 percent positions on the long side. In the options segment, the weekly series has decent open interest build up at 18000 call indicating it to be the immediate hurdle. On the put side, the open interest data is scattered with support range placed at 17800-17700 range.

Technically, Nifty is trading in a channel and the higher end of the channel is seen around 18000 wherein even the open interest build up in call options is seen. Once this hurdle is taken out, we could see short covering which could then lead the index towards 18200-18250 in the near term. On the flipside, the immediate support for Nifty is placed in the range of 17800-17700 followed by 200 EMA support around 17550. Traders are advised to look for buying opportunities on intraday dips and trade with a positive bias.

(Ruchit Jain is the Lead – Research at 5paisa.com. The views expressed are the author’s own. Please consult your financial advisor before investing.)