Trade setup: Nifty likely to stay volatile, may face profit taking

The penultimate session of March F&O expiry was highly volatile as the NSE Nifty swung over 100 points on either side before ending with a loss of 0.33 per cent.

Prime Minister Narendra Modi announcement on the Anti-Satellite (ASAT) test added to the highetened trading activity.

On Thursday, the expiry of the current derivative series is likely to increase volatility. A flat to mildly negative start is expected and the session will witness activities dominated with rollovers. The 11,500 level is expected to pose stiff resistance.


Thursday’s session will see 11,500 and 11,560 levels act as stiff resistance. Supports may come in at 11,400 and 11,410.

The Relative Strength Index (RSI) on the daily chart stood at 65.4462 and it continued to remain neutral, showing no divergence against the price.

The daily MACD, though it remained bullish, was seen narrowing its trajectory. A black body emerged on the candles. Apart from this, no major formations were observed.

The pattern analysis showed that Nifty was again consolidating with 11500-11575 zone acting as strong resistance points.

After testing 11,572 level following a breakout from a formation, the index has exhausted its strength and it is now seen consolidating with a corrective bias.

The volatility is almost certain to be seen in Thursday’s trade and much of this would be induced by rollovers.

We again recommend traders to stay away from major directional calls and continue to keep exposures at modest levels.

Given the much wider than normal width of Bollinger bands, Nifty is unlikely to give any runaway upmove. All rallies will continue to remain vulnerable to volatile profit taking bouts at higher levels.

(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at milan.vaishnav@equityresearch.asia)