A small negative candle was formed on the daily chart with a long upper shadow. Technically, this pattern indicates false upside breakout of the range movement at 25,500 levels. Having rejected sharply from the new highs, minor dip can’t be ruled out in the short term, said Nagaraj Shetti of HDFC Securities.
In the open interest (OI) data, the highest OI on the call side was observed at 25,400 and 25,450 strike prices, while on the put side, the highest OI was at 25,400 strike price followed by 25,350.
What should traders do? Here’s what analysts said:
Hrishikesh Yedve, Asit C Mehta Investment InterrmediatesTechnically, the index formed a Shooting Star-like candlestick pattern on a daily scale near its all-time high, signalling exhaustion of buying pressure or some short-term profit booking in the index. Therefore, on the upside, 25,600-25,620 will act as an immediate hurdle for Nifty. If the index sustains above 25,600 strongly, it could test the 25,750 levels in the short term. On the downside, 25,280-25,300 serves as an immediate support base for Nifty followed by 21-DEMA support, which is placed near 25,120 levels. As long as Nifty stays below 25,620, a “Sell on Rise” strategy is advisable for traders.
Tejas Shah, JM Financial & BlinkX
The candlestick (Shooting Star) pattern formed on the (Nifty) daily chart is not an encouraging one. Presently, the Nifty index is facing a lot of resilience around the crucial resistance zone of 25,500-25,550 levels and we believe that Nifty will further outperform only if it is able to decisively close above this resistance zone or else consolidation is likely to continue in the range of 25,200 to 25,500-550 levels. Support for Nifty is now seen at 25,350 and 25,175-200. On the higher side, the next crucial resistance zone is at 25,500-550.
Rupak De, LKP Securities
The Nifty formed a Shooting Star pattern on the hourly chart, suggesting an early sign of a bearish reversal. Additionally, the Nifty failed to close above the rising trendline despite a gap-up opening and strong global cues. Going forward, the sentiment may remain sideways to weak as long as the index stays below the 25,550–25,600 range. On the lower end, support is placed at 25,350. Below which the Nifty might correct down towards 25,100-25,000.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
