Nifty 50, which was witnessing incremental highs with declining strength, got its first taste of violent gains during the session. The index started the day well. The market opened on a marginally positive note and maintained decent gains by trading sideways till the afternoon. However, the second half of the session saw a very sharp corrective move;
The Nifty 50 index dropped nearly 250 odd points from its intraday high. There was some recovery in the last hour of the session. The headline index closed the day lower by 104.75 points (0.67 percent).
We have weekly options expiration coming up. The strikes of 15,700 and 15,800 saw heavy call writing during the day. The maximum concentration of Call Open Interest buildup is at the 15,800 level, followed by the 15,700 level. There was also a sharp decline in input open interest at the level of 15,700.
All this indicates that the index is unlikely to cross 15,700 in the next session and this point will cause tremendous resistance for the market. Volatility index India VIX fell below 15 points to fall 3.10 percent to 14.7525 – its lowest level in the last 18 months.
15,700 and 15,745 levels are likely to be seen as resistance points on Thursday. Support comes at the 15,600 and 15,500 levels.
The Relative Strength Index (RSI) is at 65.56 on the daily chart. It has moved below the overbought zone below 70, which is bearish. However, the RSI is neutral and shows no divergence against the price. The daily MACD is bullish and above the signal line. A big black candle has gone out. This marks the 15,800 level as an intermediate top for the market until it is cleared.