A decisive breakout above 11,200 may induce a strong rally in the market. On the other hand, a breakdown below 10,800 may trigger short-term bearishness in the market.
Nifty, on March 6, started the day above its previous day high and remained in the green throughout the session which suggests the absence of large unwinding of long trades.
On the other hand, a small candle on the daily frame suggests lower follow-up buying at higher levels. The overall bias is positive, however, a sign of cautiousness is seen in the market as the headline index approaches the previous resistance zone.
In addition, the index has seen to have found resistance around 90 percent retracement (currently pegged at 11,058) of the previous fall from 11,118 to 10,585.
On the options front, maximum open interest (March 28) position is visible in 11,500 CE (20.86 lakh shares) and 11,000 PE (32.64 lakh shares); followed by 11,000 CE (18.74 lakh shares) and 10,500 PE (23.41 lakh shares).
Going forward, Nifty may find resistance at the previous swing high which is currently pegged at 11,120, and sustained trades above 11,120 may induce a rally towards 11,200.
Again, a decisive breakout above 11,200 may induce a strong rally in the market. On the other hand, a breakdown below 10,800 may trigger short-term bearishness in the market.
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