In our monthly report published on July 05, we had mentioned, “the index is trading in the sideways zone of
15,500–15,900” and advised to “follow buy-on-dip strategy until the index is trending above 15,500–15,400.” The
index may resume momentum once it crosses and holds above 15,900.
The index started the week on a positive note and gained 1.47% in this period. Simultaneously, it protected the previous
week’s low and formed a bullish candle on the weekly chart along with a higher-high and higher-low price structure.
Further, it closed above 15,900, at an all-time-high level. The momentum indicator RSI turned on to a positive slope and
is currently placed at 67–68 on the weekly chart. However, MACD is still trending flat and yet to show a positive crossover on the weekly chart. Apart from RSI and MACD, the index is trending above all long-term key moving averages on
the weekly chart, with a positive directional moving index.
Likewise, on the daily chart, the index is trending in the sideways zone and formed a rectangular price pattern in the last
20 trading days. Simultaneously, it is above all key moving averages and from February 2021 onwards, it has been
trending in an upward-sloping parallel channel. Apart from price action, the momentum indicator RSI on the daily chart
is trending in the neutral zone and showing a sideways trend. The daily RSI is currently trending around 62 level and
our bias would turn positive once it crosses 64 level.
On the options data front, PCR for monthly contracts expiring July 29 stands at 1.31. From the OI data perspective, for
monthly contracts expiring July 29, maximum Call OI built up was seen for 16,000 strike price, followed by 16,500 strike
price, which piled up to 59.38 lakh contracts and 36.93 lakh contracts, respectively. Likewise, maximum Put OI built up
was seen for 15,000 strike price, followed by 15,500 strike price, which piled up to 76.30 lakh contracts and 60.52 lakh
contracts, respectively. Further, strike-specific option data suggests that Nifty might face strong resistance at 16,000
levels, followed by 16,300. On the downside, it might take support near 15,800 levels, followed by 15,600–15,500.
As per the O’Neil Methodology of market direction, the market is currently in a “Confirmed Uptrend
” with three distribution days
in the last 25 trading sessions.
All the above technical parameters, along with derivative data and O’Neil Methodology of market direction, indicate that
the index has started trading above its consolidation zone of 15,500–15,900. In the last week, it closed above 15,900
for the first time and from now onward our bias would remain positive until it trades above this level.
We expect sustainable trading above 15,900–15,950 may lead the index toward 16,200–16,400 levels in the coming
few days and week(s).
Apart from Nifty50, Bank Nifty
may also do well in the upcoming days and may retest its previous all-time high of
FII/ DII Activity in the Fourth Week of June
Current Status of Major Sectoral Indices - Per O’Neil Methodology Current Status of Major Global Indices - Per O’Neil Methodology
SWINGTrader India performance chart