The 50-DMA is placed at around the 22,400 level, and a slip below this level could shift the test to the 22,300-22,260 zone. However, crossing 22,660 could resume the bullish trend, Om Mehra of SAMCO Securities said.
On the daily chart, the Nifty has now bounced back from close to the 50-day SMA after four sessions of losses. Chartists said that the 14-day RSI at 50.33 is falling and remains below its 9-day EMA, indicating that the momentum is weakening.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan
On the daily charts, we can observe that Nifty consolidated within the range of the previous trading session and has formed an inside bar pattern which makes the extremes of the range 22,700 – 22,400 crucial levels to watch out for. A breakout on either side shall lead to a treading move in that direction. In terms of levels, 22,420- 22,313 is the crucial support zone while 22,820 – 22,900 is the crucial resistance zone from a short-term perspective.
Rupak De, LKP Securities
The highest call writing is visible at 23,000, while significant put writing at 22,500 indicates that the Nifty might oscillate between 22,500 and 23,000 in the next few days. However, a fall below 22,500 might trigger a correction towards 22,000.
Tejas Shah, JM Financial & BlinkX
Nifty is trading around a make-or-break support zone of 22,400-500 levels (50-day EMA Support area) and a sharp movement of 2% to 3% can be expected on either side from this zone, preferably on the higher side. As long as Nifty is holding above 22,400-500 levels (+/- 25 points), there is no major sense of panic as of now. The short-term moving averages are just around the price action and should continue to support the indices on any decline. Supports for the Nifty are now seen at 22,400-500 and 22,200 / 22,000-050 levels. On the higher side, immediate resistance is at 22,600-650 levels and the next resistance zone is at 22,825-850 levels.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)