In the final hour of the trade, the markets saw some weakness again, but managed to close on a modestly negative note, losing 91.60 points or 0.61 per cent.
Thursday is a trading holiday. This makes Wednesday a day of weekly options expiry. The level of 15,000 continues to have the highest accumulation of Call OI, making it a key resistance level for the trading day.
On the lower side, the strikes of 14,800 have a maximum Put OI, followed by 14,600 levels. Below 15,000, the strikes of 14,800 and 14,850 saw fresh Call OI addition of 1.2 million and 1.1 million shares respectively. This makes the point of 15,000 a very crucial resistance for the markets. Nifty will have to move past that point for any meaningful up move in the near future.
Volatility continued to slide. India VIX declined by 1.95 per cent to 19.8300. Wednesday is likely to see the levels of 14,900 and 14,980 as resistance points. The supports will come in at 14,780 and 14,700 levels.
An Evening Star pattern occurred on the candles. Although this has a potential to halt the current up move, it is not a precise evening star pattern. However, its occurrence near the resistance points of 15,000 and following an up move requires us to take note of that and not disregard it.
The pattern analysis shows Nifty staying inside the falling channel. It presently stays above the 50-, and 100-DMA, which stand at 14,737 and 14,553.
All in all, if the present options figures and data do not change much, it may keep the markets within a defined and capped range. However, we recommend continuing to stay highly defensive. While continuing with a stock-specific approach, exposures should be kept limited. A cautious outlook is advised for the day.
Milan Vaishnav, CMT, MSTA, is a Consulting Technical Analyst and founder of Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at email@example.com
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