Thursday’s session is likely to remain guided by the weekly options expiry. Also, the upcoming will be the last trading session of this truncated week, as Friday is a trading holiday on account of Good Friday.
The market is expected to stay in a range, and as per the options data, the 8,500 strike holds the highest Put open interest, followed by 8,700. The maximum Call OI stands at 9,000 level.
Volatility saw a marginal increase as India VIX moved higher by 0.85 per cent to 52.24.
Thursday’s session is likely to see 8,810 and 8,895 levels act as overhead resistance. Support may come in at 8,550 and 8,410.
The Relative Strength Index (RSI) on the daily chart stood at 43.01 and remained neutral, showing no divergence against the price. The daily MACD continued to remain bullish and traded above its signal line. A candle with a long upper shadow was formed on the daily charts.
The emergence of this type of candle near the resistance point adds to the credibility of the 9,050-9,100 zone as stiff resistance.
As per pattern analysis, Nifty has attempted to mark a potential bottom by first making a low near 7,800 and then a higher bottom near 8,050. However, it is yet to be confirmed, as this would happen only after Nifty moves past the 9,050-9,100 zone and stays above those levels.
The market is likely to display a cautious and tentative mood given the long weekend. That being said, the present technical structure also warrants a cautious approach as Nifty is yet to provide any sort of confirmation of a temporary bottom. The market will continue to remain vulnerable above 9,000 levels unless the 9,050-9,100 zone is taken out.
We would advise traders to keenly watch the market behaviour against the 9,050-9,100 zone in the event of an upside. With Nifty likely to remain broadly in a defined range, we recommend continuing avoiding excessive exposures. We suggest protecting profits on either side as long as Nifty stays in the present trading range.
(Milan Vaishnav, CMT, MSTA, is a Consulting Technical Analyst and founder of Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at firstname.lastname@example.org)