Trade setup: Stiff resistance to Nifty at 15,700-15,800 levels

It was yet another day of a range-bound move by the Indian markets on Friday as the Nifty oscillated in a tight range before ending with minor losses. The markets saw a quiet start to trade on the expected lines. The Index traded in positive territory in the first hour of the session where it also marked its intraday high. Soon after that, Nifty slipped in the negative territory where it spent most part of the session. However, the index moved in a capped range and did not take any definite directional bias. At the end, the headline index settled with a small loss of 20.10 points (-0.13%).

The Nifty may again see a positive start to the day. Volatility remains at its lowest levels in the recent months, and this warrants us to guard against the possible reactionary move. However, there are no such signs that point towards any major drawdown but from now on, while chasing the momentum, trailing stop losses and protection of profits at current and higher levels will be a must. The options data suggest that the levels of 15,700-15,800 pose very stiff resistance to Nifty. Volatility increased as the India VIX rose by 1.24% to 15.9400.

Although Nifty is in uncharted territory, the 15,725 and 15,790 levels will act as resistance points. The supports will come in at 15,580 and 15,500 levels.

The Relative Strength Index (RSI) on the daily chart is 70.32; it is in an overbought zone but remains neutral as it shows no divergence against the price. The daily MACD is bullish and remains above the signal line.