May 21,2020 Trade Plan-Nifty may continue follow-up pullback; but be cautious

Expiry of weekly options is going to dominate Thursday’s session. Options data is throwing up some exciting figures, which showed near-similar and maximum Call open interest concentration at 9,100, 9,200, and 9,300 strikes.

This means Nifty is facing strong resistance at either of these levels. Also, this covers the 50-DMA, which is also a major resistance point on a closing basis; and it currently stands at 9,154.

Nifty (9067) Nifty is still weak so our level 8700 is still valid…stiff resistance exists at 8981- 9450’ the Nifty bounced back due to weekly expiry ahead of the holiday on Friday…Technically some more short covering is not ruled out up to 9390…support 8980

All in all, there are possibilities of some follow-up pullback continuing in the initial trade, which may extend itself a little bit. As a short-term trader, one may chase the extension of the uptrend, if it happens. However, at the same time, it would not be advisable to get complacent with the rally, and it is strongly advised to keep protecting profits at higher levels. A cautiously positive approach is suggested for the day.

Nifty Bank (17840) 17368 is a strong support and so a technical bounce ahead of the weekly expiry is not ruled out…16900 could be the next support… stiff resistance exists at 18351’ the Nifty Bank bounced back as expected and has closed in the green…technically now 18351 is possible as long as 17368…
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