The 23,500-23,540 range will act as an immediate support zone for the index. A strong break below 23,500 will push the index further lower to 23,300-23,200 levels, where a trend line support is placed. Overall, the short-term trend is down, but as long as Nifty holds above 23,500, a pullback rally could be possible, 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 23,600 and 23,700 strike prices, while on the put side, the highest OI was at 23,500 strike price followed by 23,550.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan
On the daily charts we can observe that the index is trading around the 200-day moving average (23,556). The index is trading at a crucial support level. There can be a pullback as the hourly momentum indicator has triggered a positive crossover, however, the trend remains weak, and a pullback towards 23,700 – 23,750 should be used as a selling opportunity as the overall trend remains negative. On the downside, we are expecting 23,180 which coincides with the 61.82% fibonacci retracement level.
Rupak De, LKP Securities
On Thursday, Nifty closed near its 200-day EMA, forming a gravestone Doji-like pattern on the daily chart, signalling bearish sentiment. This suggests a “sell on rise” approach as the index hovers in an oversold zone near a key EMA level. A bounce is likely, but it should be seen as an opportunity to sell. If Nifty breaks below the 200-day EMA, selling pressure could intensify. The index has support at 23,450, with resistance expected at 23,650, framing the short-term trading range.
Nagraj Shetti, HDFC Securities
Nifty on the weekly chart formed a long bear candle, which is nearing the next important support of an intermediate Ascending Trend line around 23,300 levels. The underlying trend of Nifty continues to be negative. Though there are some signs of an oversold nature, but still there is no confirmation of any crucial reversal pattern forming at the lows. A decisive slide below 23,500 is expected to drag Nifty down to 23,200-23,000 levels by next week. However, a sustainable move above 23,700-23,800 levels could open chances of a sizeable upside bounce in the market.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)