Hello reader, hope you’re doing well. For the 6th day in a row, Nifty has ended up forming an inside bar as it currently stands, and we’re seeing a major resistance on the index at 17900 levels. Along with it, this contraction period would serve as a good setup and a trigger for a directional move (which can happen on either side), but for upside it is very important for the index to sustain above 18000 for a while which will bring in some momentum.
One interesting setup which we’ve found here is that of ICICI bank, and a breakout in this stock – upon crossing 883, can reach 920-950 levels, and this would be good for Nifty as well, since it’s a heavyweight stock which would bring in some additional strength for upside. RSI has given a bit of an early signal, confirmation of trend upon price crossing 883 shall be seen, as shown in the chart below
Also, since we’re on the second expiry of this month today, quite a bit of volatility is expected, especially on the index, with 18000 CE having the highest OI on calls side, and 17700 PE having the highest OI on puts side for now. Good sign would be 17800 being held on Nifty. On Banknifty, we see 41500 CE having the highest OI on the calls side, with 41000 PE having the highest OI on the puts side. We also see 41500 being a major resistance on the index for now, so a good expiry bet would be 41500 short straddle keeping a 40% SL on both sides for today. Have a good trading day, and may the force be with you!
Disclaimer: this post is for educational purposes only, we are not SEBI registered analysts. Trades mentioned here are not trade recommendations. Equity Investments are subject to 100% market risk, please consult your financial advisor before investing.