The index slipped into negative territory after trading in a limited range for some time. The markets made no headway on either side and oscillated in a defined range throughout the day while staying sideways. The headline index finally ended flat with a negligible loss of 0.80 points (-0.01%).
Despite the fact that we see the markets consolidating with a positive bias, the current technical structure and options data suggest that we should not anticipate or take a potential breakout. It would be more prudent to let the breakout actually happen rather than be aggressive pre-emptively. Nifty futures for the July series has shown an OI of over 3.08 lakh shares or 3.16%.
Maximum Call OI concentration remains stable at the 16000 levels. Volatility fell further to 4.60% and now INDIAVIX remains at an uncertain low.
The beginning of the day in the market may look sluggish. The 15960 and 16000 levels will act as resistance points. Support comes at the 15860 and 15800 levels.
The relative strength index (RSI) on the daily chart is 62.39; It continues to show a strong bearish divergence against the price. The daily MACD is bearish and is trading below the signal line. Apart from a black body occurring on the candles, no other major formations were seen on the chart.
Pattern analysis shows that Nifty marked an incremental high near 15960 levels; However, it has not given any clear and clear breakout from its former high of 15915. Unless this level is pulled out solidly, we will not see any permanent breakouts.
With Nifty remaining uncertainly at its high point, there is no sign yet to suggest any major imminent weakness. Also, with breakouts not clearly occurring, we recommend staying highly stock-specific and selective when it comes to markets. While shorting should be avoided until the breakout shows signs of failure, profits on long positions should be cautiously protected at higher levels