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Nifty

Nifty closed above its 20 days EMA after a strong consistent trending move coupled with a sequence of gaps. The first ‘Spinning Top’ candlestick formation around 19140 could now be considered as an ideal level for maintaining stops for existing or new momentum-based longs. Both its trend strength indicators too are diverging now with RSI rising towards 50 while ADX is gradually falling with a rise in its positive DMI value which is about to break its 25 zone. Options data for the week ahead shows firm base at 19200 followed by 19300 while 19500 has highest CE OI build up followed by 19800. Unwinding pressure above 19500 could set the momentum for an up move towards 19800 during the series itself. Technically, the index registered a close above the anticipated weekly cluster resistance zone around 19350-19450; further unwinding above 19500 could lead to further short squeeze during the week. At 18850, the major base is still intact. In the short term, expect the index to hold steady until 19140, while an extended advance above the 19540–19600 range would bolster the upward trend even more.be added even on declines until 19500 holds while momentum longs to be added with a stop below 19620 & reviewed once the index trends within 20000-20140 zone.

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