Gap Up Turns Bearish: The market opened with a gap up today but took a sharp downturn in the first candle, with both indices displaying significant bearish sentiment on the 5-minute timeframe. This indicated substantial selling pressure and profit booking.
Breaking Support Levels
Nifty broke yesterday’s swing support at 21402 levels, witnessing a substantial decline, while BNF also saw profit booking after breaking yesterday’s lows.
Support and Shifting Positions: After finding support at 21354 levels for Nifty and 47680 levels for BNF, the market saw a shift in positions. Nifty consolidated below 21400 levels, building substantial support at 21300 and 21400 levels, hinting at potential bounce-back once crossing 21400.
Intraday Recovery
Nifty, after making a price action above 21406 levels, experienced significant shorts covering, rising sharply to touch an intraday high of 21504 levels. However, profit booking ensued in the last hour.
Resistance and Closures
Both indices closed below major resistance levels of 21500 and 48000. If these levels are breached, significant shorts covering is anticipated.
Volatility and Technical Indicators: Despite market fluctuations, VIX initially rose but cooled down after touching yesterday’s high. It still hovers above major levels of 13, suggesting more volatile moves. PCR data for both Nifty and BNF rose, indicating a mix of buying and profit booking.
Outlook and Caution
While hammer candles with longer lower wicks signal buying pressure at lower levels, caution is advised. Both indices remain in the overbought zone, and consolidation or profit booking is expected before the long weekend or during the last week of the monthly expiry during rollovers. Traders should closely monitor crucial support and resistance levels for potential market moves.
