The markets are once again positioning itself in a precarious condition. The rallies that we have witnessed over the past couple of days have come purely on account of short covering, as evident by the consistent decline in the OI. This is a cause of concern, more so when the NIFTY is just short of being mildly overbought. The lead indicators show bearish divergence pointing towards the impending possibility of exhaustion at higher levels. We have an extended weekend once again, as Monday has been declared a trading holiday by the bourses on account of assembly elections in Maharashtra. Friday may stable start to the trade, but the possibility of markets encountering substantial overhead resistance cannot be ruled out.
Friday is likely to see the levels of 11610 and 11675 acting as resistance. Supports come in lower at 11510 and 11450. In the event of any corrective move, the trading range may get wider than usual.