The NSE Nifty closed on a strong note on Friday after a spurt in the second half of the session, as the index zoomed 150.05 points or 1.33 per cent.
With exit polls coming in on Sunday evening, the opening on Monday is bound to be volatile. The exit polls can potentially cause a gap-up or a gap-down opening.
Having said that, if we discount this big event, a stiff resistance exists at the 11,500 level. As of Friday’s close, the strike price of 11,500 has highest Call open interest built-up and under normal circumstances, this level is expected to act as resistance.
If we attempt to remove the elevated noise levels, which are likely to be created by the exit polls outcome, the 11,500 and 11,550 levels will act as resistance on Monday. The supports may come in at 11,330 and 11,280.
The Relative Strength Index (RSI) on the daily chart stood at 48.2903 and it remained neutral, showing no divergence against the price.
The daily MACD stayed bearish and traded below its signal line. A big white body emerged on the candles. Apart from this, no major formations were seen on the candles.
It is important to note that despite attempting to paint a technical picture of the trade on Monday, there are high chances that we see the session defying the technical levels on the either side. The exit polls are certain to infuse volatility and we are very much likely to see the market oscillating back and forth on the either side.
We recommend traders to stay away from aggressive bets and continue to adopt a high degree of caution.
(Milan Vaishnav, CMT, MSTA is Consultant Technical Analyst at Gemstone Equity Research & Advisory Services, Vadodara. He can be reached at [email protected])
Source: Economic Times