Volatile session on cards, stay light!

Volatility was the hallmark of Wednesday’s trade as after opening with a positive bias, Nifty resisted around the opening level of the prior session, and thereafter, witnessed a roller-coaster ride for the entire session.  

At one point in time, the index fell nearly 190 points from the day’s high and breached its important psychological mark of 15,000. During this downmove, it filled the gap of February 8 and took support near the 5-EMA. Nifty bounced back sharply from the lower levels and recovered around 130 points. Despite this Herculean effort by the bulls, the index ended with modest losses.   

The price action of the day formed a Doji like pattern as the index closed near its opening level and formed a lower high & lower low. The last three days of price structure are given the exhaustion of the trend. The confirmation for the weakness is still elusive. Unless the index moves decisively above or below the last three trading ranges, it would be a tough time for the intraday traders as high volatility within the range is likely to trigger stop-losses on both sides. Hence, it’s better to wait and watch until there is a confirmation of the breakout of the range.   

With the weekly expiry on the cards on Thursday, it is likely to be yet another day of volatility. Going ahead, a close below the prior bar low of 14,977 levels, and then the likelihood of weakness extending towards 14,800 levels shall remain higher. Strength in Nifty shall not be expected unless it manages to close above the 15,150 levels.