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Nifty

Nifty staged a strong pullback move that eventually helped the index register a close above its 5 & 20 DEMA levels. It also ensuredafirmclosingback within the channel pattern range of 23180-22180. The ongoing instability might subside once there is a clear announcement of theupcoming cabinet formation & road ahead, which may keep the volatility meter high. Traders may continue to exercise caution&refrainfrombuilding leverage positions until the event volatility cools down completely below 18 levels on India VIX. Option data indicates 23000toremainastiff resistance while support seems shifting higher towards 22500 followed by 21000 (monthly basis). Traders may continue toexercisecaution& refrain from building leverage positions until the event volatility cools down completely. Traders are advised to remain selectivewhiledeploying longs & utilize intraday declines to add longs rather than chasing breakout moves. While investors should start looking for freshemerging pockets of strength from here on until the index completes its time correction / consolidation.

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