oct 15,2020-Nifty pullback can be deceptive, 12,000 level crucial to watch.

What seemed to be a day of correction, turned out to be a day of smart recovery as the bulls returned. On expected lines, Nifty saw a negative start to the day. After the market opened in the negative, the index stayed within a sideways trajectory and also kept on making incremental lows.

Despite the market showing a sharp surge, the pullback can be deceptive as it has come on the back of heavy short-covering as evident from the F&O data. Large Call writing was seen at 11,950 and 12,000 strikes. The 12,000 strike holds maximum Call OI followed by 12,250. The level of 11,800 has the highest Put OI.

Thursday's session is likely to see the levels of 12,000 and 12,065 acting as resistance points, while support would come in at 11,910 and 11,850 levels. The Relative Strength Index (RSI) on the daily chart is 69.50; it stays neutral and does not show any divergence against the price. The daily MACD is bullish and trades above the Signal Line.

Pattern analysis suggests that after breaking above the 11,400-11,430 zones, Nifty has marked a temporary resistance point near 12,000 levels. This level will continue to act as a strong resistance area unless taken out comprehensively.

Going ahead from here, unless Nifty moves past the 12,000-mark convincingly, it would be prudent to keep protecting profits at higher levels. While avoiding heavy purchases at higher levels, a cautious stock-specific approach is advised for the day.

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