Trade Setup: Nifty prone to profit taking bouts near 15K; stay stock specific

Domestic equity benchmark index Nifty not only marked its fresh lifetime high on Wednesday, but also ended at a fresh closing high today.

Nifty continued to exhibit broad buoyancy as it opened on a positive note. However, after opening positive, an initial round of profit taking had Nifty taking a sharp dip in the first hour of the trade. The market soon recovered and then kept making higher highs. The final hour of the trade saw some profit taking again as the index came off its high point. Still, the market managed to sustain decent gains as it ended higher by 142.10 points or 0.97 per cent.

Importantly, the index managed to move past and stay above the 14,650-14,750 zone. We have the weekly options expiry coming up. This shows that while significant Call unwinding happened at 14,600 and 14,700 levels, significant Put OI addition also happened at 14,700 and 14,800 levels. Overall, the OI analysis showed that the highest Call OI concentration stood at 15,000, while maximum Put OI stood at 14,500 and 14,700 levels. If Nifty stays longer above the 14,650-14,750 zone, it may test 15,000. Any slip below 14,700 may make Nifty weaker.


Thursday’s session will see the levels of 14,875 and 14,960 acting as resistance points, while support will come in at 14,700 and 14,580 levels.

The Relative Strength Index (RSI) on the daily chart stood at 63.52, showing a negative divergence against price. The daily MACD continued to remain negative as it stood below its Signal Line. A spinning top occurred on the charts. However, although this signals lack of consensus at higher levels, this will need confirmation on the next trading bar to see if it stalls the present up move.

There are possibilities of a trading session which can have a bit wider trading range than usual. If we see a buoyant start, then the market will stay prone to profit taking bouts as it nears the 15,000-mark. We recommend continuing to stay stock specific and also vigilantly guard profits at higher levels.

(Milan Vaishnav, CMT, MSTA, is a Consulting Technical Analyst and founder of Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at