Nifty futures traded strongly last week to recover most of the losses it incurred in the previous week’s fall to close the week at 22543. NSE had a special trading session on Saturday (18th May,2024) but Nifty experienced lackluster volume and closed with a minor gain of 0.21%. Major gainers for the day were Nestle India (2.41%), PowerGrid (1.2%), and Tata Motors (0.87%).
Volume & OI Analysis: The Daily volume in Nifty 50 futures on Saturday stayed low but on a WoW basis the volume stayed higher than average. The Cumulative Open Interest (COI) on Saturday, didn’t change much and stayed around Friday’s levels. The weekly COI stood at 91 million and the WoW change of COI stood at 36%, which may be relatively high considering the last “6 months” COI data. With such a high COI we may expect some drastic movements in the index.
Price and Volume Analysis: Price analysis of Nifty 50 futures indicates further upside, towards the resistance of 22700-750. The expectation of bullishness is supported by a huge positive delta (net of buyers and sellers by volume) over the week, which stood at 1.81 million and is much above the average weekly delta buildup. Moreover, the prices were able to breach and sustain above the “monthly VWAP” supporting the bullishness in the prices.
The immediate upside target seems to be the supply zones around 22700-750 but any upside from these levels may depend on the volume and COI build-up around those levels.
Scenarios: Traders may experience these scenarios in the next few forthcoming sessions
Scenario 1: Prices may continue toward the resistance(supply zone) of 22700-750
Scenario 2: Prices may correct towards the support of 22370-350(the monthly VWAP) and restart the uptrend.
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