Technical View on Nifty as on 03/04/2013

Technical view based on Hourly Charts:

Nifty had been showing a bearish undertone for quite some time. However, on 1st April, Nifty gave a positive breakout on the hourly charts and also managed to close above the 200-day EMA. The breakout was sustained even the next day with further upmove to 5750 + levels to touch the 20-day EMA.

However, today Nifty fell down to re-test 5650 levels. As per Auto Channels, 5653 is a major hourly support level and it has held good. Today's close of 5672.90 is just above the 200-day EMA indicating that it held onto the 200-day EMA. Today's fall was a panic sell out may also be considered to be formation of a panic bottom.

As per Open Interest (OI) Data of Nifty, Nifty has max OI of over 85 lacs on 5600PE and over 57 lacs each on 5900CE. This indicates strong support at 5600 levels and upsides possible to 5900 levels. As per India VIX at 14.87, the volatility has cooled down considerably from 17+ levels which also suggests limited downside.

As per above data, Nifty may likely show a bounce from current levels and may likely head upto 5729, 5805, 5856 levels. However, if 5653 level is broken out, Nifty may slide down to 5593 levels.