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Nifty

Selling pressure amplified once the index breached the range support at 22200 followed by 22100. Further follow through action could be witnessed in today’s session as the large bearish candlestick formation closed the day below its 20 DEMA support level of 22180. Options data indicates for the day indicates further shift in range on the lower side with key bounds placed at 22000-21800 itself. India VIX (Volatility /Fear Index) is still confined within 16 level (its 200 WEMA level) & 13.50 (its 20 WEMA); a consolidation breakout would be an early sign for traders deploy confident leverage positions. Until then the outlook remains neutral to cautious as sector rotational move would attract further rise in volatility. With the short-term support base for the week being breached its ideal to refrain from building positional longs until there is a firm reversal pattern formation on its weekly scale or when the index clearly surpasses the resistance zone above 22400. Weekly closing below 22150 could confirm a further immediate decline towards 21500 in the coming sessions as well. For the day 22080 remains a strong supply hurdle while 21830 could provide some support for a short-lived recovery.

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