The momentum indicator aligns with this bearish outlook, displaying a crossover. Nifty might remain in sell-on-rise mode as long as it remains below 21,850. On the downside, support is at 21,500, Rupak De of LKP Securities said.
Open Interest (OI) data showed the call side revealed the highest OI at 21,800, followed by 22,000 strike prices. On the put side, the maximum OI was observed at the 21,500 strike price.
What should traders do? Here’s what analysts said:
Rajesh Bhosale, Technical Analyst, Angel One
Nifty also breached the critical 20-EMA support level, previously holding firm over the past two sessions, suggesting potential further weakness in the short term. While Nifty remains range-bound with 21,500 serving as strong support, today’s struggles in the broader markets indicate a likelihood of breaking these levels, potentially opening the path downwards towards 21,350 – 21,250 in the upcoming sessions. Conversely, resistance levels have shifted lower to around 21,800 – 21,850, having acted as barriers in the previous two sessions. Traders are advised to reduce long positions during any price rebounds and to refrain from bottom fishing until clear signs of strength emerge.
Jatin Gedia, Sharekhan
On the daily charts, we can observe that the Nifty has closed below the 20-day moving average (21,684) which is a sign of weakness. The daily momentum indicator has triggered a negative crossover which is a sell signal. Thus, both price and momentum indicators suggest weakness. The broader market witnessed a deep cut even today. The midcap index was down 2.57% and the smallcap Index cracked 4% today. The crucial support zone for the Midcap index is placed at 46,960 – 46,550 and that for the smallcap index is placed at 15,440 – 15,400.(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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