The short-term trend of Nifty has turned down from the highs after a small rise and the selling pressure seems to have started to emerge from near 21,750-21,850 levels. The next lower supports to be watched at 21,350, its 20-day EMA. Immediate resistance is placed at 21,650 levels, said Nagaraj Shetti of HDFC Securities.
Open Interest (OI) data showed that the call side displayed the highest OI at the 48,000 level, closely followed by 48,500 strike prices. Conversely, on the put side, the highest OI was observed at the 47,000 strike price.
What should traders do? Here’s what analysts said:
Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities
Nifty ended the day close to its support at 21,500 and the short-term 14-day moving average, accompanied by a bearish engulfing candlestick pattern. This indicates a change in market sentiment. If 21,500 is breached in closing figures, Nifty may move towards the next support level at 21,200. The support of 21,500 if held can see recovery towards 21,650 which is the immediate hurdle zone.
Shrikant Chouhan, Kotak Securities
Technically, the index has formed a bearish candle on daily charts and it also formed a lower top formation on intraday charts, which supports further weakness from the current levels. For the short-term traders now, as long as the index is trading below 21,650/71,800 weak sentiment is likely to continue. Below the same, the market could slip to 21,450-21,400/71,000-70,900. On the flip side, above 21,650/71,800 the sentiment could change. Above 21,650/71,800, the market could retest the level of 21,750-21,780/72,200-72,300. The current market texture is volatile hence levels-based trading would be the ideal strategy for the short-term traders.
Jatin Gedia, Technical Research Analyst at Sharekhan
On the daily charts, we can observe that the index has broadly traded in the range of 21500 – 21850 in the past couple of weeks. There are multiple support parameters in the form of the key Fibonacci retracement levels (21507 & 21406) and the 20-day moving average (21426) which are likely to provide a cushion in case of a correction. We expect Nifty to halt its fall at support levels and consolidate before resuming the next leg of the up move.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
