Nifty has been crawling throughout the current month but has managed to keeps its float about 11,500 & inched higher towards 11,800 marks. Out of last 15 trading sessions it has witnessed 11 sessions with narrow ranged action with 7 Doji formations throughout the course. It has been respecting its 5 days EMA & has ensured a close above the same throughout and a close below the same could signify exhaustion of the existing run. Index has been trading in close proximity to its upper end of rising channel resistance around 11,780 and a breach higher is unlikely in the coming sessions hence expect moderate upside with bouts of sharp intraday corrections. As risk reward ratio is unfavorable for fresh bullish bets the strategy to be adapted is more on booking profits around and trade the swing on the short side incase the index closes below its 5 DEMA currently once below 11,640 if that materializes. Option pain for the current series is also resting at 11,650 as of now & hence becomes a confluence zone for fresh shorts below the same.
CMP: Rs 221.90
Fresh breakout from a continuation pattern indicates the ongoing upmove to remain constant. Also a sustained move & a close above its immediate highest CE OI congestion of 220 could derail the option writers confidence & provide further stimulus for the upmove. Expect the move to extend towards 228; hence the same could be participated with a trading stop below 217.
CMP: Rs 558
Occurrence of Bearish Engulfing formation at the upper end of the declining channel formation could be a sign of exhausting pullback. Fresh shorts could be considered with a stop above 568 for an immediate swing towards the lower end of the pattern placed around 500.
Disclaimer: The analyst may have positions in any or all the stocks mentioned above.