Tuesday’s upmove could be a cheering factor for the bulls to make a comeback. Further sustainable upside from here could confirm near term bottom reversal pattern. A decisive move above 25,000 levels could possibly open the next upside resistance of 25,400-25,500 in the near term. Immediate support is at 24,700, said Nagaraj Shetti of HDFC Securities.
In the open interest (OI) data, the highest OI on the call side was observed at 25,000 and 25,200 strike prices, while on the put side, the highest OI was at 25,000 strike price followed by 24,800.
What should traders do? Here’s what analysts said:
Hrishikesh Yedve, Asit C. Mehta Investment Interrmediates
Technically, on the daily chart, the index formed an insider bar candlestick near short term trend line support and the previous demand zone. Thus, as long as the index holds above the low of 24,690, levels of 25,150–25,350 could be possible. Investors should adopt “buy on dips” strategy for short term in Nifty index.Rupak De, LKP SecuritiesThe Nifty formed a bullish harami pattern on the daily timeframe, indicating rising optimism. Additionally, the index has moved above a critical moving average on the hourly timeframe. The RSI has made a bullish crossover in the shorter timeframe, further supporting the positive outlook. In the near term, the index may move towards the 25,350–25,400 range. On the downside, support is placed at 24,850, and a break below this level could lead to weakness.
Praveen Dwarakanath, Hedged.in
Nifty has seen the dead cat bounce which was expected from its low of 24800. However, it is yet to close above the previous day’s high, indicating the weakness to continue. The momentum indicators have recovered from the Over-sold region, however, the ADX average line is still showing weakness to continue. One can take a further bullish view in Nifty only on a close above 25300 levels, until then the index can be sold on the Rise. Options writer’s data showed a significant increase in call writing at 25000 levels even in this bounce showing weakness to continue in the index.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)