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Nifty

Occurrence of the ‘Dark Cloud Cover’ candlestick formation within the anticipated resistance zone is a sign of caution. Upside is expected to remain capped around 21900-21960 zone even if we see a follow through move during the week while major support ahead of the event now stands at 21100-20960 zone. Options data indicates firm bounds at 21500-21800 for the week with fresh call writing around 21800 & 21900 strikes concurring with the limited upside expectations. Since the trend strength indicators are still diverging its ideal to remain cautious & refrain for building any aggressive positions on either side until the range holds for the ongoing week. We expect the index to remain oscillating within its broad range with resistance zone around 21700-21900 zone while key support remains at 21400 & 21100. It’s best to stay nimble footed and avoid developing any leverage positions ahead of the forthcoming Budget session, which also includes the first weekly expiry session of the February series.

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