Nifty began the trading day on a positive note, with its bullish momentum carrying it forward. However, in the final hour, there was a notable instance of profit booking. As a result, the index closed the day at a higher level of 23,519. The volatility index India Vix witnessed a significant surge of 3.26%, reaching 15.66, which clearly indicates an increase in market volatility.

Technically Analyzing Nifty's Daily Chart

On a daily scale, Nifty has formed a Doji candle, which implies a certain level of uncertainty in the market. The high of this Doji candle is in close proximity to the 23,780 level. This particular range of 23,780-23,800 will act as a critical resistance for the index. On the contrary, the 50-weekly simple moving average (WSMA), which is positioned near 23,300, will offer short-term support to the index. According to Hrishikesh Yedve of Asit C Mehta Investment Interrmediates, in the short term, the trend remains down as long as the index stays below 23,800.

Open Interest (OI) Data Insights

In the open interest (OI) data, it was observed that the highest OI on the call side was concentrated at the 23,500 and 23,600 strike prices. On the put side, the highest OI was at the 23,500 strike price, followed by 23,400. This data provides valuable insights into the market sentiment and the potential areas of interest for traders.

Market Outlook and Implications

The current market situation presents a complex scenario. The bullish start was followed by profit booking, and the Doji candle on the daily chart indicates uncertainty. The critical resistance at 23,780-23,800 and the short-term support at 23,300 will play a crucial role in determining the future direction of Nifty. Traders need to closely monitor these levels and make informed decisions based on the market dynamics. The surge in the volatility index also adds an element of risk to the market, and traders should be cautious while trading. Overall, a detailed analysis of these factors is essential for a better understanding of the market and making profitable trades.