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50% of Nifty stocks having 65% weightage are within 10% of their 52-week highs, which if crossed and sustained, will propel the index higher initially towards 9300 and then 9700 levels. In the case of decline, 8800 will be a critical support level.
One needs to be watchful of India VIX (volatility index), which is trading near a two-year low, and any sharp up move in VIX could lead to a short-term reversal in market trend.
However, if the index breaks below 9060 level, it would witness selling which would take the index towards 9,020-9,000. The weekly strength indicator, RSI, is moving upwards and is quoting above its reference line indicating a positive bias.
The Nifty future may find support around 8983 and 9065 on the downside (8983 is the 150% price extension drawn from low of 4592 to high of 6349, and 9065 is the 150% price extension drawn from low of 4538 to high of 6349).
The Nifty future has closed at the lower level of the daily charts showing weakness for the next day. The volumes were more as compared to previous day showing strength in the up move. Nifty future has closed above 9065.
If it remains above 9065 then immediately on the upside it will find resistance at 9191. A close below 9065 can take Nifty lower to the level of 8983. Buying at lower levels is advisable. We assume a bullish and sideways trading session for this week.