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Nifty - Ready to cross the 16000 levels soon

At a turtle speed, Nifty is moving forward and ready to touch the 16000 levels soon. This is a phycological level and Nifty can go beyond that because as soon as it will stay 16050 for some period of time, in any time frame, due to short-covering rally, it will try to reach near 16200 level.

Open interest indicates, there is heavy call writing already happened in 15900, 15950, and 16000 levels, 31k, 15k, and 42k. One gap-up opening can create panic among call writers, even if they again sell heavily at 16000 levels, it will only increase the chance of short covering.

Everyone will agree on one point that momentum is completely missing from the stock market. It seems there is a good fight going on between retailers and institutions. FIIs are not leaving any chance to sell their portfolio stocks on higher points and minting money by profit-taking on every high rise level.

The VIX is 13.37 on Friday does not show that a strong bull run is awaiting, but we can not ignore that VIX is really concerned. The prolonged periods of persistently low volatility can inevitably lead to the phases of high volatility.

There are strong possibilities that as long as the NIFTY stays below the psychological 16000 levels, it will remain weak and will welcome volatile profit-taking bouts at higher levels.

Although all technical indicators are not favouring a strong bull run, because 16000 is a phycological level and it could move forward to achieve its target of 16195.

We may not immediately start building aggressive shorts, it is definitely the time that we protect our long positions.

This is the time when strict trailing of stop-loss levels will help in optimum protection of profits at current and higher levels.

Thanks for reading

Keep Investing

Happy Trading


Neeraj Bhatia

Managing Director

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