Nifty 50 headed for 12300 in 2-3 weeks? Bulls in control; watch this crucial resistance level | INTERVIEW

The Nifty 50 index rallied 600 points so far in October this year; the benchmark index now seems to be stuck in the range of 12050-11650, amid heightened share market volatility, says Manish Hathiramani, proprietary index trader and technical analyst, Deen Dayal Investments. Nifty 50 has been trading in this range for the last 8-9 days, and, according to Hathiramani, is “respecting the principles of a choppy market”. Even as it hit 12022, Nifty 50 did not do anything much. However, an upside is seen beyond 12050 on the index. “If we get past 12050, we shall be able to touch 12300 in two to three weeks,” said Hathiramani.

On the downside, supports are holding near 11650 levels, which shows that the bulls are inherently in control. This can be further seen in the fact that Nifty is turning back up from the midpoint of the range, instead of falling all the way down to 11700. “I would not recommend to trade unless either levels are disrespected,” Hathiramani said, adding that people must have direction before taking a trade, they should have inclination in one particular direction. Whether there’s a PUT spread or BUTTERFLY spread, there has to be a basic premise of direction. Hathiramani believes that for the time-being, markets are directionless and range bound with a positive bias.

Historically, whenever markets have gone into short-term trend, from expiry to expiry, there hasn’t been a situation of no trend in two weeks at a stretch. Traders evaluating a trend from September expiry to October expiry, in the first 15 days, had ample opportunity to make money. As, in the first 15 days of this month, Nifty 50 rallied 600 points. “I would not recommend traders to take hasty decisions and get into the trade, when they can not get into a trade,” Hathiramani added.

In the past 6-7 trading sessions, Nifty has witnessed range-bound movement. And ahead of today’s weekly expiry, Nifty hasn’t done anything much. Infact, last Thursday also, there wasn’t much benefit from a trading perspective. “Unless there’s a movement of 1.5-2 per cent, I don’t trade,” Hathiramani said.