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Nifty

Nifty commenced the week on a strong note as it scaled confidently towards 23100 zone but witnessed some profit booking near the upper end of the channel pattern. Since last 13 sessions the index is confidently trending above its 5 DEMA level (22800) despite the final hour shake out. Its trend strength indicators are trending higher with ADX displaying a fresh breakout above its 25 level; strong sign of conviction & further momentum. With a rising support zone at 22800, the Nifty is heading boldly beyond the upper end of the channel pattern resistance, which is located around 23180. Option data indicates a higher range formation of 22800–23500 zone for the next week, which indicates the conviction amidst traders. Meanwhile, the confident call writing bound has moved higher, towards 23500. A hint of instability might be seen as the election results get closer which could increase market volatility. Traders may continue to exercise caution & refrain from building leverage positions until the event volatility cools down. Traders are advised to remain selective while deploying longs & utilize intraday declines to add longs rather than chasing breakout moves with a stop at 22630

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