Dalal Street Rollercoaster: Profit-Taking looms as volatility soars
The last trading day of the week saw the index swinging wildly. During the week, the Nifty oscillated in a 446.65 range before closing the week on a flat note. The benchmark Index posted minor weekly gains of 55.90 points (+0.25%).
There is something more that needs to be noted from a technical perspective. While the Nifty has stayed flat, the volatility has shown a huge spike. This is evident from the India Vix spiking by a massive 33.80% to 14.62. This continues to show some quantum of uneasiness in the markets. More so, the rise in the VIX and the NIFTY over the past few days has made the markets vulnerable to profit-taking bouts like the one seen on Friday.
Historical data shows that often through such behavior, VIX has ended up issuing prior warnings to any impending profit-taking bout. The NIFTY did mark its fresh lifetime high of 22794.70; however, the 22775 level still remains an immediate top for the markets as it was not taken out convincingly. In short, so long as Nifty stays below 22775, it is likely to consolidate in a broad trading range showing volatile moves on either side.
Monday is likely to see a stable start to the trade. The levels of 22650 and 22775 are likely to act as potential resistance levels. The supports come in at 22300 and 22050 levels.
The weekly RSI is 65.61; it stays neutral and does not show any divergence against the price. The weekly MACD stays bearish and trades below its signal line. A Doji has been formed on the candle; its emergence near the high point has the
