Nifty is moving in a downward channel and the leading indicator, RSI is in an upward channel. This divergence of price making a lower high and the RSI making a higher high is giving clear signs of suspicions. We have not seen this kind of negative divergence after March 2020.  

A long build-up was seen in Nifty PSU Banks with PNB climbing 7.7 per cent with an open interest addition of 13.90 per cent. Bank of Baroda also witnessed an addition of 7.60 per cent in the open interest with a price rise of 5.44 per cent. Canara Bank has seen the addition of 1.99 per cent while SBI saw an addition of 1.55 per cent in the open interest.  

On the options' front, the 14,500 Put option has seen a massive open interest addition in today’s session as it added a 20.74 lakh share in the open interest. With this, the total open interest concentration in 14,500 Put option has reached 39.26 lakh.

Among the sectoral indices, the majority of the indices were trading lower, led by Nifty Financial Services and Bank Nifty. On the other hand, Nifty Pharma and Nifty Energy were trading in green.  

India VIX is back in green thereby, indicating that volatility is rearing its ugly head. Going forward, the level of 14,880 can be an important level to watch out for on the index.  

In the derivative segment, Sun TV and Indiabulls Housing Finance are two probable stocks that can enter into a ban period.   

The daily RSI is forming an inverted head & shoulders pattern. Watch out for the level of 60 closely as a move above this level will lead to a resumption of an uptrend after a decent consolidation.  Bollinger Bands are still moving at a parallel distance. As Nifty is above the 20-DMA, be with a positive bias as long as it trades above it. The MACD histogram shows that the bearish momentum has declined significantly.  

There were two important takeaways from Tuesday’s session, which has laid the foundation for the weekly options expiry day. Read this to know more: 

Technically, Nifty has been witnessing the formation of a lower high & lower low on the daily chart and along with this, it has breached its important short-term moving average i.e., 20-DMA. Though on the weekly chart, we have seen the formation of a bullish candle as the close of the week was greater than the opening of the week.

Technically, the index might have logged gains of 115 points on Thursday. However, the day’s range was confined within 111 points while the gains were largely due to the gap-up opening. Since Thursday’s trading range was the lowest in the last seven trading sessions, it led to the formation of the NR7 pattern.