The near-term uptrend of Nifty is still intact and the market seems to have shifted into minor profit booking mode as per a smaller time frame chart. A move below 20,850 could slide Nifty towards another support of 20,700 levels (10-day EMA), said Nagaraj Shetti of HDFC Securities.
OI data showed that on the call side, the highest OI was observed at 21,000 followed by 21,200 strike prices while on the put side, the highest OI was at 20,900 strike price. On the other hand, Bank Nifty has support at 46,900-47,000 while resistance is placed at 47,250 and 47,500 levels.
What should traders do? Here’s what analysts said:
Rupak De, Senior Technical analyst at LKP Securities
On the higher end call writers have built a heavy position at 21,000. On the lower end, put writers are heavily present at 20,800 and 20,900. Therefore, the Nifty is likely to remain mostly sideways to negative as long as it remains below 21,000. Only a decisive move above 21,000 might induce a resumption of the uptrend. Support is placed at 20,800, below which the index may consolidate further.
Avdhut Bagkar, StoxBox
The index trended lower throughout the trading session as the selling pressure kept intensifying and ended the trading day with the formation of a bearish engulfing pattern on a relatively higher volume. This potentially indicates a temporary arrest on the upside unless the high of 21,037 is decisively taken out. The market breadth remained discouraging as only 18 constituents from the Nifty 50 basket closed in the green.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)