The index has retested the rounding bottom pattern breakout, which is around 24,540. Overall, Nifty witnessed a time-wise correction during the past few days. Once this timewise correction is over, the index is anticipated to resume its upward journey. On the downside, 100-Day Exponential Moving Average (100-DEMA) support is placed near 24,350. As long as the index sustains above it, traders are advised to adopt buy-on-dips strategy. On the upside, the index might test the levels of 24,800-25,000 in the short term, said Hrishikesh Yedve of Asit C. Mehta Investment Interrmediates.
In the open interest (OI) data, the highest OI on the call side was observed at 24,600 and 24,700 strike prices, while on the put side, the highest OI was at 24,500.
What should traders do? Here’s what analysts said:
Jatin Gedia, Mirae Asset Sharekhan
On the daily charts, we can observe that the Nifty has been stuck in a narrow range of 24,500 – 24,800 since the past five trading sessions. A decisive move above 24,750 shall suggest that the next leg of upmove has resumed. On the downside, 24,500 – 24,450 is the crucial support zone. As far as derivative data is concerned, 23,000 PE and 26,000 CE have the highest build-up for the 19th December weekly expiry. In the previous trading session, a significant addition in OI was witnessed at the 24,600 strikes suggesting that ATM straddles are being created indicating rangebound movement is likely. The Nifty Weekly PCR stands at 0.77 which suggests slightly bearish sentiment.
Rupak De, LKP Securities
The Nifty slipped below the recent consolidation on the daily chart, indicating a weakening trend in the near term. However, the decline was limited, and the index managed to stay above 24,500. This sideways consolidation in Nifty may persist for a few more days as the index remains within a defined range. A decisive fall below 24,470 could trigger a meaningful correction in the market. On the higher side, resistance is seen at 24,650-24,700.
Nagraj Shetti, HDFC Securities
A small negative candle was formed on the daily chart with a minor upper shadow. Technically, this market action reflects ongoing range-bound action in the market. The consolidation movement or minor weakness could be continued in Nifty for the next 1-2 sessions before showing upside bounce from the lower levels. Immediate supports to be watched around 24,400-24,350 levels for the short term. Intraday resistance is placed at 24,700 levels(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)