Its been tough for positional traders over the last few days. Nifty saw movements of 3-4% on opposite directions everyday. Even the intraday volatility has shot up suddenly over the last 2 days. Nifty moved in a 2% zigzag movement during the day. A sharp intraday player probably enjoyed these movements but I guess most of them lost. The nifty has been really in a fix. It seems that it is terribly confused to decide its future direction. Most people are now convinced that Nifty cannot breakdown since it showed lot of resillience over the last few days. Infact, I have also started feeling the same. But market says that the trend is very much down, though with an upward bias. This is very dangerous. The current PCR suggests that maybe Nifty will move up a bit to take the futures into a premium. Over the last fortnight, futures traded at huge discounts, hardly filling the gap. In the scenario, I believe that Nifty futures might move upwards into premium suddenly and then fall from there. Otherwise, 2660 in spot is a critical level; close below which might open the downward doors.
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