The index opened with a gap down paving way for both FIIs and DIIs to sell (net) across all segments. We are currently going through a much anticipated correction. I have maintained a rising trend channel keeping today's low as the lower end since the index is yet to retrace up a little before resuming its downward journey. Given that the Stochastics on the hourly chart is at an extremely oversold zone (although there is plenty room for it to bottom out on the daily chart
, thereby confirming more downside to come), there could very well be a slight retracement tomorrow.
On the upside, the index can move towards 21800, beyond which it should try and test 22040. These levels should give good shorting opportunities.
On the downside, below 21200, the index can correct up to 20800 (38.2% fib retracement from the top of recent rally) and finally try to bounce back above 21000 towards the end of the day.
The broad range of this week's expiry remains between 21000 and 22000.
: The above levels should be used as approximation.