Tech view: Bulls to prevail above 16,860

The markets experienced tepid trade on Monday despite a holiday shortened week ahead of the derivatives expiry. This itself, makes enough a reason for higher volatility-cum-action for the next two days. The ideal scenario looks like an up-day on Wednesday followed by a down-day on Thursday.

However, given the steep fall in Asian markets yesterday and somewhat subdued cues this morning. Our markets too may remain under pressure at least in the first half of the trading day.

A first glance at the charts indicates that the bulls are likely to have the upper hand as and when the Sensex crosses 16,860 during the day. In other words, this can be seen as a pivot point for bullishness on Wednesday. However, once the index begins to trade below 16,860 then it is very likely to drift below Monday's low of 16,705. Longer the index stays above 16,860, and then brighter are the chances of the index visiting 17,100.

The momentum oscillators are entering oversold zone. However, one needs to wait for a change in direction before hoping for any pull back rally.

The NSE Nifty took support at 4,980 mentioned on Monday. The index finally ended with a loss of 28 points at 5,008. The Nifty will exhibit bullish trend above 5,036. On the upside, the index may jump to 5,110-5,165. On the downside, below 4,980 the index is likely to revisit 4,940.

One can expect huge swings in select stocks owing to the derivatives expiry this Thursday.

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