Nifty: Trading Settings: Nifty50 could remain ranged on monthly F & O maturity dates

It was a day of extraordinary movement and integration for the Indian stock market. Nifty50 Stayed within the defined range and ended the day with a small loss. Nifty50 saw a quiet start of the day. It quickly became stronger and continued to mark the highest points of the day in the first hour of trading. Gradually, the headline index traded flat around the previous closing price, curbing the rise in the morning. Then, for the rest of the session, the Nifty 50 went nowhere and spent time in a sideways orbit. The market saw some upside movements, but in the end the index ended the day with a minor loss of 19.65 points (-0.11 percent).

The weekly option is approaching its expiration date. Apart from that, we are approaching the maturity of derivatives this month. Weekly options show the clear behavior of market participants. On Wednesday, 17300 strikes saw a large amount of call writing over 3 million shares. This means that it is very important to move over 17300 for a meaningful extension of the rise. Not only this, this level can provide strong resistance to the monthly expiration Nifty 50. On the lower side, the maximum put OI can be seen at the 17000 level. This means that the market may remain in a wide trading range on the maturity date.

A lukewarm start is expected on Thursday. The Nifty50 is expected to see solid resistance at the 17300 and 17345 levels. Support is provided at 17150 and 17065 levels.

The Relative Strength Index (RSI) is 49.27. It remains neutral and shows no difference in price. Daily MACD is bullish and trades on the signal line.

The Nifty 50 formed a spinning top candle on the daily chart. This type of candle shows the indecisive behavior of market participants. With the exception of some minor daytime spikes, the Nifty 50 showed no directional bias throughout the day. Sessions can continue to be dominated by rollover-centric activities. Also, the market may remain highly stock-specific in nature, and no particular sector will dominate the session. However, in all cases, it is advisable to keep your exposure at a reasonable level and limit it to low beta and defensive stocks. We recommend a cautious and positive approach for the day.

(Milan Vaishnav, CMT, MSTA are consulting technical analysts, founders of EquityResearch.asia and ChartWizard.ae (ChartWizard, FZE), and are based in Vadodara. Contact milan.vaishnav@equityresearch. asia)