Nifty may face selling pressure around 5900 levels - SMC Global

Nifty opened on a negative note last week around 5900 levels and traded downward with high volatility. However, it bounced back on Friday's trade after short covering rally in front line stocks. The index has indicated some signs of reversal on the daily charts by closing above 5800 levels.

For the June series, the costof-carry increased marginally indicating positive in the short-term. The Implied Volatility (IV) of calls fell on Friday to close at 17.99% while that for put options fell to 17.72. The Nifty VIX(Volatility Index) for the week traded in the range of 17-20. It is currently trading above its 10-day EMA. Among Nifty options, the 5700-strike put has the highest open interest of 75 lakh shares and 6000-strike call, which have Open Interest (OI) of over 70 lakh shares respectively.

The PCR OI (Put Call Ratio Open Interest) for the week rose and closed at 0.93. It is taking strong support around the 0.80 mark. Nifty may face selling pressure around 5900 levels. On the downside, traders should keep an eye on 5750 levels. Short term indicators are indicating upward momentum to continue for the next resistance of 5900 levels.

Source : Equity Bulls

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