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Nifty50 surged 272 points or 1.6 percent on the first day of the New Year to close at 17,626 levels on January 3. Intermediate trend turned bullish as Nifty has broken out from the downward sloping trendline, adjoining the highs of October 19 and November 15, 2021. During the last week, Nifty has surpassed the crucial resistances of 50 and 100-day EMA (exponential moving average) which gives further evidence of an uptrend. Short term indicators and oscillators like DMI (directional movement index), RSI (relative strength index) and MFI (money flow index) have been showing strength in the uptrend of Nifty.

In the Index Futures segment, FIIs have been creating fresh longs, where their net long to short ratio is above two. In other words, out of their total positions in the Index Futures, 70 percent is in long side while 30 percent is in short side.

In the Option segment, we have seen aggressive Put writing at 17200-17300 levels. This level also coincides with the 20-day EMA which is currently placed at 17237 odd levels. Therefore, we believe that short term trend will remain bullish till Nifty is trading above 17,200 levels.

Next upside targets for Nifty is seen around 17,805 levels, followed by 18,000 levels. Longs should be protected with trailing stop-loss of 17,200 in Nifty.