How will Nifty perform next week? Let us analyse!

Last week was quite a volatile one for Nifty as it made huge moves in both directions. It had made a low of 16,891 on Monday and a high of 17,543 on Thursday, which is about 652 points or a 3.86 per cent move in just four trading sessions. Nifty closed the week at 17,511 thereby, forming a bullish candle with a long wick at the lower side. Moreover, it closed above the previous week’s high, suggesting upmove on cards!   

The key event on Friday was the US inflation data, which came out to be 6.8 per cent as expected. As this news broke out, both Dow as well as Nasdaq shot up and ended in the green. SGX Nifty was also seen ending its evening session in green. So, it is expected that Nifty will open positively on Monday. However, any weekend news cannot be ruled out.   

On the derivatives front, we see that the 18,000-call option had the highest open interest, followed by at-the-money 17,500 while on the put side, 17,400 had the highest open interest, followed by 17,200. Interestingly, the highest change in OI is found to be on 18,000 call and also on 17,400 put strike. The PCR stands at 1.01, indicating a directionless week. However, we must wait for further clarity on Monday.   

The 17,613-level happens to be major resistance as it is the prior swing low, and any closing above it will pave the path for 17,700-17,800 levels. On the downside, 17,400 happen to be a major support level and in case, if Nifty breaches this level, we might witness 17,200 to be the next support level.