The Nifty cracks to 23300, after opening higher to 23592.

FullscreenTap to expand

The market quickly gave up opening gains from 23592, falling to 23300, we believe the most action is done and we may see choppy trading activity in indices for most of the day favoring options sellers only to be dismissed by closing session.

However, a support base is visible at 23300, which could lead a short-covering to 23450 on crossing previous hour’s high.

Contra short positions can be created near 23450-23500 for a target of 23100-23000, while resistance of 23600 becomes ideal stop-loss for the short positions.

On the macro front oil and oil derivatives are higher leading to higher inflation and food prices. Unless either one of the Hormuz or Black sea situation calms down diesel and crude may remain elevated.

Snap from Friday’s update-
Technically, we may see short covering today in the 2nd half to 23400/23500 due to oversold level on daily chart and could even extend to 23600, but sustaining gains over few day looks less likely unless we see some bigger outcome form BRICS Summit over weekend.

Technical support remains 23000-23100, India Vix is trading at 12.35, sustaining above 12.20 may increase volatility and risk in the market in coming week post BRICS.

—————————-
By closing below 24000 Nifty has entered into the larger picture with downside potential to 23000-22500. Read below…

FullscreenTap to expand

Nifty completed 61.8% retracement the entire fall at 24752 during consolidation, and has now breached below the trend line support of 24000, resuming down trend to 23000-22500 level.

23600-23500 zone may act as 1st deterrence level post breakdown below 24000, on oversold readings and short-covering leading to re-testing of breakdown area near 24000 and BRICS positive optimism from BRICS summit.

BoJ Interest rate policy is the key event to watch out for which may act as trigger for rest of the Macro issues surfacing in the market dynamics, and a global sell-off scenario.

___ ___ ___ ___ ___ ___ ___