The Nifty 50 index saw a steady start, but remained in positive territory throughout the day, showing no intention of correcting. Though the index witnessed slight volatility, the overall session remained in a narrow range with Nifty 50 scoring 100 odd points. The headline index finally ended the day with a net gain of 102.40 points (0.65 percent).
At the start of the day, the highest call open interest was seen centered at 15,800. It remained unchanged and kept the index below this point. Heavy put writing was witnessed at 15,600 and 15,700 levels. It saw an increase in maximum put open interest to the 15,700 level. This ensured support to the Nifty 50 index at 15,700.
For the coming week also, as of now, the 15,800 strike remains the open interest maximum. The immediate high point for the index is also 15,800. This means that for a strong move to continue, the index has to move above its level. Until that happens, there is a possibility that the market will face strong resistance at this point.
15,780 and 15,820 levels are likely to be seen as resistance on Friday. Support will turn lower at 15,640 and 15,550 levels. In the event of any corrective move, the trading range is expected to be wider than normal.
The Relative Strength Index (RSI) is at 68.31 on the daily chart. It remains neutral and shows no divergence towards the price. The daily MACD is bullish and above the signal line. However, the narrower slope of the histogram shows bearish momentum for Nifty 50.
An inside bar occurred on the chart. It also translates into a harami pattern on the candles. This indicates potential weakness, especially when it is near the high point. However, in any case, this would require a confirmation on the next bar on the chart. Proceeding from here, Nifty 50 remains in unknown territory. However, at the same width, it has shown mild signs of the formation of a temporary top at 15,800. It is recommended to refrain from aggressive buying irrespective of the trend till the time the Nifty 50 index moves beyond its previous highs.