Markets recovered from the lows

In the last one week, Nifty traded within a range of 400 points but the index swayed on both sides due to several news flows. The negative geopolitical news from Israel had an initial impact last week. Markets recovered from the lows, but it has largely been within a broad range. 

The global news flows have had a significant impact on our markets since the second half of September due to which our markets entered a correction phase, post forming a high around 20200. However, post the initial price-wise correction, the index recovered from the support of 19300 and then formed a higher support base at the 19500-19450 range. FII had formed short positions at the start of the series, and they have more than 70 percent of their positions in the index futures on the short side. In the weekly options, the 19700 put has 19800 call has the highest open interest outstanding. The RSI oscillator is technically hinting at positive momentum on the daily chart and hence, till the above mentioned supports are intact, one should trade with a positive bias and look for buying opportunities on declines. While the immediate support base is placed at the 19500-19450 range, the resistance is seen around 19800-19850. If the index surpasses this hurdle of 19850, then there could be short covering which would support the market momentum.