Nifty may oscillate 17190-17415 range

The stock market ended its five-day steep fall. The benchmark index NSE Nifty up by 128.85 points or 0.75 per cent, and closed at 17,277.95 points. The sharp recovery led by PSU banks and auto sector stocks. Only IT index is declined by 0.33 per cent on Tuesday. The PSU Bank index is up by 4.24 per cent. The Auto and Media indices advanced by 2.32 per cent and 2.22 per cent, respectively. The Bank Nifty up by 2.02 per cent. Other sector indices are up by 0.7 per cent to two per cent. The volatility index cooled off by 6.43 per cent and closed at 21.35. The market breadth is positive as 1,330 advances and 728 declines. About 66 stocks hit a new 52-week low and 281 stocks trade in the lower circuit. Axis Bank and Reliance are the top traded counters in terms of value.

The NSE Nifty has recovered from a panic bottom. Banks and auto sector stocks led the recovery. The Nifty gained by over 0.67 per cent on a comparatively low volatile day. India VIX declined by over six per cent after a 22 per cent sharp surge. The frontline index declined below the previous day low in the first 15 minutes. With buying support from the panic low, it gradually recovered and closed at the day's high. It recovered 472 points or 2.8 per cent from the day's low. At the same time, it also retraced almost 30 per cent of the sharp decline. It took support at 78.2 per cent retracement level of the prior uptrend. On a 75-minute chart, the RSI has closed above the prior swing high and confirmed the bullish reversal for a very short-term. At the same time, the MACD has given a fresh buy signal on the same chart.

As we expected the pullback is done for the day. But, the daily chart shows an increased negative histogram because the Nifty has made lower low and lower high candles. The daily RSI is just on the 40 line. The global markets recovered sharply from the day's low, and the Dow futures trading in the green zone is another reason for today's bounce. It closed above the 150DMA. The immediate resistance is placed at 17415, which is a 38.2 per cent retracement level. On the monthly expiry day, the Nifty may oscillate between 17190-415 zone, and expect volatility. The Implied Volatility (IV) also declined slightly. The At The Money (ATM) premiums are a little higher side due to high volatility.

(The author is financial journalist, technical analyst, family fund manager)