Nifty closes at very confusing state. I do not know what sentiment works for the traders who drive Nifty above its previous close. Not only that, it also closed above its pivot point 5038.
From the derivative point of view, it is observed that around 12.00 lakh shares were reduced in open interest with increase in the cost of carry, indicating short covering in the
market. On the other hand in the option front, implied volatility has decreased by around 250-350 basis points, indicating that buying may continue to emerge at lower levels.
However I still believe that still Nifty is in the bearish zone until it closes above 5078.
I personally assume that the range 5224 and 4932 is the neutral zone. 5078 is working as a border line between bear and bull.
Tomorrow opening may be another flat opening. Positive or Negative that does not indicate much.
On the upper side : After 15 min of opening, if Nifty stay above 5048 then it may hit 5060 and above 5060 it may test 5078 which also works as first resistance . Above 5078 it may hit 5104. (possibility still under ?)
On the lower side : If Nifty unable to stay above 5036 then it may hit 5024 and below 5024 it may test 5006. 5006 is the first support and second support comes at 4972.
Tomorrow Nifty may be range bound between 5024 to 5060 and closing between this range will cause another confusing trading session.
Please put your comments and questions if this post helps you to trade better.
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