Present weakness is unlikely to damage the near-term uptrend status of the market and one may expect chances of an upside bounce from the lower levels. Immediate support is to be watched around 21,600-21,500 levels, said Nagaraj Shetti of HDFC Securities.
OI data showed that on the Call side, the highest OI was observed at 22,000 followed by 22,100 strike prices while on the Put side, the highest OI was at 21,500 strike price.
On the hourly momentum indicator, chart readers noted a negative divergence, which indicated a loss of momentum on the upside.
What should traders do? Here’s what analysts said:
Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas
Overall, the range-bound trading action is likely to continue until we get a decisive close below the extremes of the broad range 22,000 – 21,200. The momentum setup on the daily and hourly timeframes provides divergent signals, which again suggests sideways price action. Thus, parameters suggest that the consolidation is likely to continue. Stock-specific action and sector rotation are likely to continue during this period of consolidation. Key support levels are 21,640 – 21,600 while the immediate hurdle zone is placed at 21,950 – 22,000.
Om Mehra, Samco Securities
The formidable upper Bollinger band is a robust resistance, positioned at approximately 22,000. Additionally, 21,950 remains the level from where the Nifty has slipped in the previous two sessions. It would be important to watch out for these levels in the coming sessions.
Ajit Mishra, SVP – Technical Research, Religare Broking
Indications are in favour of consolidation to continue and expect Nifty to respect 21,450-21,600 zone in case the profit -taking extends. Interestingly, the prevailing buoyancy in the PSU pack and broader indices has not been impacted so far but we feel traders should now maintain caution while chasing the momentum and keep an exit plan in place.
Kunal Shah, LKP Securities
The Nifty index has formed a double-top pattern on the daily chart, signalling a potential cautionary stance for traders. The resistance level is identified at 22,200, and a decisive break above this on a closing basis could invalidate the bearish outlook. Conversely, the support for the index is situated at 21,650, coinciding with its 20-DMA (20-day moving average). A breach below this support level might intensify selling pressure in the market.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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