Nifty witnessed a sturdy up move since


Nifty witnessed a sturdy up move since 19th May ’20 post the occurrence of the ‘Homing Pigeon’ candlestick formation at the base of its ongoing Channel pattern. After a strong rally of 13 sessions the index did witness some profit booking pressure since the beginning of the day as it slipped from 10326 towards 10120. Options data so far indicates 10000 to remain a key support for the week while upside remains capped within 10300-10500 zone. OI-PCR has also cooled off from 1.11 to 0.91 while IVs are still trending lower. On its daily scale there is no sign of any meaningful reversal formation on the price chart yet, while the index has managed to sustain above its 5 DEMA which is currently placed around 10030. RSI (14E 9) on the other hand has been quoting at 68.50 & yet to hit the overbought conditions while ADX (9) has been sustaining well above 25 & currently quoting at 31.70 despite the pressure which is a good sign of strength. Hence looking at the indicators in conjunction with the OI developments the probability of a sustained uptrend remains high until a decisive break down below 9930 is not witnessed. A move above 10240 in the coming session would reinstate momentum for a move towards 10550 (200 DEMA); hence long should be maintained with a Trailing stop strategy until 9930 holds.