Hardik Ruparel, Technical Analyst, Centrum brokingWhere we are: After a breakdown from a range of 11,650-12,250, Nifty fell to 85,55, which looks, arrested after it hit lower circuit on Friday.
All stock combined open interest has reached a lowest level in the last three years indicating huge unwinding in leveraged positions.
Historically such unwinding coincides with major bottom in the markets.
The index closed at 9,955 almost 12% from lows as buying emerged at lower levels.What is in store: The Street expects RBI intervention following action by most global economies and the index could regain 10,400-10,800 levels soon.
Only dampener would be the high reading of VIX, which could make violent moves in markets on either sides.What traders can do: The Nifty is expected to carry forward the positive momentum going ahead.
The right strategy to adopt in the current market situation is to accumulate on decline with a stop loss of 8,500 and target of 10,450-10800.
Stocks from the metals, banks and FMCG space look attractive for trading longs whereas IT stocks could continue to underperform.