Markets have taken nosedive from the all time high levels and for the last couple of sessions they are showing no mercy. The amazing part of the correction is that while the index has hardly corrected 10% the individual stock portfolios have taken plunge up to 30 to 40%. Anyways let us now focus on technical part and try to analyse the current situation.
The breach of 9000 levels led the accelerated moves toward the 11000 levels as technically it was the Neckline area of inverted H&S pattern. The pattern target was +2000 points from 9000 which it did and did it at a lightning speed. The Nifty darling has now entered a correction phase and we already have the correction of more than 1000 points. The darling today tried to kiss the very sensitive part i.e. its 200 DMA which is placed around 10131. Fortunately the bulls still have maintained it on a closing basis. As per the Fibonacci Levels the darling has kissed 76.4% retracement level which coincidentally is around the sensitive part that we mentioned.
As per the Open Interest Data liquidation was seen at 10400 PE & CE strikes which indicates some profit booking by bears and panic situation for the bulls. 10000 PE Strike has OI of 4 lac which clearly suggests the strong support area as of now. VIX was also down by almost 3.5% which is quite surprising.
From the above observations we are of the opinion that we may see sharp bounce towards 10250-10300 levels provided bears fail to breach 10000 level on a convincing manner. On the other hand if 10000 is breached convincingly we may see further panic selling across the board. As the breach of 10000 mark means 200 DMA gone, 74.6% retracement gone and PE writers may be forced to cover the shorts which may add fuel to the fire. Consecutive closes below 10000 may drag the darling to 9550 levels which is the Golden Ratio i.e. 61.8% retracement level. On the upper side 10400-10650 may continue to act as resistance zones.
The breach of 9000 levels led the accelerated moves toward the 11000 levels as technically it was the Neckline area of inverted H&S pattern. The pattern target was +2000 points from 9000 which it did and did it at a lightning speed. The Nifty darling has now entered a correction phase and we already have the correction of more than 1000 points. The darling today tried to kiss the very sensitive part i.e. its 200 DMA which is placed around 10131. Fortunately the bulls still have maintained it on a closing basis. As per the Fibonacci Levels the darling has kissed 76.4% retracement level which coincidentally is around the sensitive part that we mentioned.
As per the Open Interest Data liquidation was seen at 10400 PE & CE strikes which indicates some profit booking by bears and panic situation for the bulls. 10000 PE Strike has OI of 4 lac which clearly suggests the strong support area as of now. VIX was also down by almost 3.5% which is quite surprising.
From the above observations we are of the opinion that we may see sharp bounce towards 10250-10300 levels provided bears fail to breach 10000 level on a convincing manner. On the other hand if 10000 is breached convincingly we may see further panic selling across the board. As the breach of 10000 mark means 200 DMA gone, 74.6% retracement gone and PE writers may be forced to cover the shorts which may add fuel to the fire. Consecutive closes below 10000 may drag the darling to 9550 levels which is the Golden Ratio i.e. 61.8% retracement level. On the upper side 10400-10650 may continue to act as resistance zones.
No comments:
Post a Comment