On Monday, the Nifty futures did not behave as expected and lost around more than 1% to close at 21568.Among the biggest losers for the day were SBI(-2.33%), SBILife(-2.28%), and DivisLab(-2.01%).With Monday’s fall, the index futures closed below the 40 SMA (equivalent to 200 SMA in 25-minute charts) for the first time since November 2023, indicating some sort of weakness that is creeping into the index.
Though the volume remained high at 7.25 million there was the cumulative open interest (COI) remained stagnant at 13.15 million. The cumulative delta for the day stood at -786.95 K, which was 10% of the day’s volume, supporting the bearishness for the day.
Though the initial analysis seems bearish, there is strong support in the vicinity. Strong support is placed at 21480-500 level which seems to be crucial for any further downside. A breach of the level with more than average volumes may pull the futures towards the next demand zone of 21380-400.
Traders may experience two scenarios in the next few forthcoming sessions
Scenario 1: Nifty futures may breach the crucial support of 21520-480 with above-average volumes and move towards the lower demand zones of 21380-400.
Scenario 2: Nifty futures may not breach the support of 21520-480 and rather the buyers may reenter in the index and slowly and steadily push the index towards higher levels.
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