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Nifty

With regard to prices, the index is still consolidating as it showed another Doji candlestick pattern within the 21800–21500 range that it has been consolidating. After rising steadily for the previous five weeks, volatility fell precipitously during the last week, which favored the bulls' trend. On a weekly basis, the India VIX fear index decreased 12.91 percent to 12.63 from 14.5 levels. According to options data, the Nifty 50 is expected to face immediate resistance at 21,800, and a break through there could push the index above 22,000. The critical support area is between 21,700 and 21,500. It is therefore best to maintain the trailing stop higher towards 21335 (20-DEMA) on closing basis for any new additions in long positions, as it is too soon to assume any significant loss of momentum or change in trend. The strategy stays in place until there is a reversal pattern or the index consistently closes below the swing support range of its previous day's low. Redeploying leverage longs is optimal once above 21840. While the major trend stop level at 20980 remains intact, any declines, if any, could be used to add longs with a trailing stop level of 21330 until broken on a closing basis.

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