Weekly options data indicatesatrading range at 18500-18000 with 18300 - Tradebulls Securities
Nifty
Yesterday again the index respected the Inverse hammer support formed on Friday as it regained from its intraday losses toregisterapositive close.The support around 18300 is well defined now; irrespective of a consecutive attempt to close belowthe samehavefailed.On the flipside the negative crossover zone of 5 & 20 EMA around 18488 should act a resistance. Weekly options data indicatesatrading range at 18500-18000 with 18300 now as a make-or-break level for the series. With PCR jumping back to 1.01; thebouncebackagain towards 18500 should be utilized to lighten up positions & avoid breakout trades As indicated last week the patternbreakdowncandle is not so convincing as its real body is relatively smaller. Hence only a decisive close below the 18260 fromhereonwouldbetheconfirmation for the same. Until then expect further gyration.On its oscillators front; RSI has already moved below50 advocatingfurtherweakness while ADX has curved up & on the verge to register a breakout above 25 (threshold for directional momentum) whichisasignof bearish mode to continue. Pullbacks if any within the broadening pattern from hereon would be temporary & hence any breakouttrades on the upside should not be chased. Short term traders should continue to retain their long short strategy with moreemphasistodeploy further shorts in case of a pullback until a meaning full reversal is not evident; current stop to be placed on a weeklyclosingbasisabove 18820 while pattern target rests below 17980.
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