On Monday, the Nifty opened the gap up with 100 points followed by SGXNifty and global cues and closed above the previous swing high of 16,275. The index gained about 1.44% and was up by 230 points (Nifty recovery) led by IT and Private Banks with a strong candle, Marubozu.
Further, Nifty has broken the nearest resistance of 16,250 and now has become the nearest support. Currently, the index has a good space for upperside after breaking the resistance. The next level of Nifty resistance is fixed at 16,450.
Earlier, a week ago, NSE Nifty dropped by 157 points closing at 16,058 points. On the other hand, BSE Nifty lost a huge 508 points and ceased the trading session at the 53,886 mark. Further, the Nifty Bank Index dipped 337 points closing at 35,132 points. The Volatility Index India (VIX) gained by 1% closing at 18.55 points. Also, the performance of the Indian stock market was totally confusing.
Chinmay Barve, the Head of Technical and Derivatives Research at Profitmart Securities, commented on the slumping indices, especially, NSE Nifty, and said that:
Nifty Open Interest Analysis
Highest Open Interest
CE Side = 1,05,366 at 16,500
PE Side = 1,21,560 at 16,200
Change In Open Interest (OI)
CE Side = At 16,500 was 25642
PE Side = At 16,200 was 1,13,084
CE Side at 16,000 was 31,393
Exponential Moving Average (EMA)
The recent data for the nearest 100-day EMA shows that it is valued at 16,433 and acts as a resistance. Whereas, the value for the nearest 50-day EMA stood at 16,138, which acts as a support.
The statistics and latest speculations indicate that the Nifty recovery might be aided further due to space for upside movement.