Last week, market breadth was largely in favour of bears and selling pressure was witnessed in every sector. Market is trading below its three major simple moving averages 20 DMA, 50 DMA and 200 DMA which are placed between 10,820 and 10,850 levels, suggesting strong resistance zone on the higher side.
Middle regression line of linear regression channel is placed around 10,850 levels, while a normal bounce back towards this strong confluence zone is awaited.
Majority of the momentum oscillators are in oversold zone creating the possibility of a bounce back.
Nifty has taken support from the lower support trend line of broadening wedge pattern which is in making since last two months, and mid-point of it is around 10,840 and any decisive move below the crucial support of 10,640 will push it at lower towards 10,500-10,350 levels.
At the same time volatility index, VIX has closed below 16 marks. Moreover, a decisive move above the stiff resistance of 10,860 will push it higher towards previous swing high 10,985.
Looking at the derivative structure, highest Open Interest (OI) in Put is seen around 10,700 strikes whereas maximum Open Interest (OI) in Call is around 11,000 levels, followed by 11,200. Option data indicates an immediate trading range between 10,700 and 11,000 marks.
Source:https://www.moneycontrol.com/news/business/markets/nifty-could-bounce-back-with-immediate-trading-range-of-10700-11000-3547971.html
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