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Occurrence of an ‘Inverse Hammer’ followed by an ‘Engulfing Bullish’ candlestick formation near its 200 DEMA support zone is a good sign for a quick reversal. Its trend strength indicators have been diverging as its daily RSI sawa reboundfromitsoversold zone while ADX is still falling along with its declining -DI which is a sign of lack of conviction. Derivativedatafortheweek indicates strong support at 16700 while sustenance above 17000 could unlock a strong unwindingmovetowards17500 which retains the highest CE OI built-up as of now. India VIX too witnessed a sharp decline once below21.20markasthe event premium collapsed post the policy announcement. Data looks more supportive for retaining longpositionswithan expectation of a move towards 17500 during the week. Technically, since the index managed to hold itself aboveits200DEMA of 16880 as well as regaining strength to close the day above its 5 DEMA zone opened the possibility of aquickswingreversal towards its 20 DEMA support zone placed around 17365. Further longs could be considered withastopbelow16780.

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