Nandish Shah, Senior Derivative & Technical Analyst, HDFC Securities
Nifty plunged 285 points on Monday amid Omicron fears to close at 16,912 levels - its lowest closing since August 27. Short-term trend of the Nifty remains weak as it shows a 'lower top lower bottom' formation on the daily chart. The Nifty is also trading below its all-important short-term moving averages.
In the derivatives, we have seen aggressive Call writing at 17,000-17,300 levels. Moreover, falling 10-day EMA (exponential moving average) is currently placed at 17,250 levels. Therefore, unless it closes above the 17,250 level, the short-term trend will remain bearish.
The Nifty made an intraday low of 16,782 levels on November 29 and bounced back. This level coincides with the previous top resistance of 16,700, which will interchange its role as a support. Therefore, we believe that on the lower side, 16,700-16,800 level will act as an immediate support.