Nifty remained flat on Friday(22nd Dec) as traders refrained from taking up new positions before the onset of an extended weekend. The index futures experienced some buying as the index futures closed with a profit of 0.24%. The major winners on Friday were Wipro(+6.6%)and HCL tech (2.86%).
On Friday the volumes remained fairly high at 8.33M but could not breach the levels of 21500-520, which remained a major resistance due to the huge volume concentration at those levels. Unless this level is breached with considerable volumes, the upside seems limited in Nifty futures.
Analysis of weekly volumes, reveals that the last week’s volume was the highest since April-23. A high weekly volume supported by a “weekly negative delta”(net of buyers & sellers) supports “bearish” sentiments for the next week(Dec 26th-Dec-29th), unless the resistance gets breached with huge volumes.
Analysing the COI(cumulative open interest) shows that at the end of the previous week, the COI stood at 14.95M with 19th December experiencing huge addition to the open interest. A huge addition in COI and a negative bias supported by a negative weekly delta further strengthen the week’s bearish view.
Traders may experience two scenarios for the week.
Scenario 1(most probable): Nifty may break the immediate support of 21250 and fall towards the demand zone of 21050 and if the level gets breached may fall towards 20950.
Scenario 2 (less likely): Nifty may breach the resistance of 21520 with huge volumes and start an uptrend.