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Nifty

Nifty displayed a strong reaction move that eventually slipped below the ‘Hanging Man’ low at 23030. The breakdown fromthe channel rangeat22180 amplified the fall towards its 200 DEMA support level around 21248 to complete the channel pattern target. The ongoing instabilitymightsubside once there is a clear announcement of the upcoming cabinet formation & road ahead, which may keep the volatility meter high. Tradersmay continue to exercise caution & refrain from building leverage positions until the event volatility cools down completely below18levelsonIndia VIX. Option data for the week indicates 22000 to remain a stiff resistance while support so far looks dependable at 21500 followedby21000 (monthly basis). Traders may continue to exercise caution & refrain from building leverage positions until the event volatilitycoolsdowncompletely. Traders are advised to remain selective while deploying longs & utilize intraday declines to add longs rather than chasingbreakoutmoves. While investors should start looking for fresh emerging pockets of strength from here on until the index completes its timecorrection/consolidation.

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