Nifty formed another doji candle well within the range of the last five day’s candles, indicating indecisiveness in the index, Dr. Praveen Dwarakanath, Vice President of Hedged.in said, commenting on the day’s action.
However, momentum indicators continue to show bullishness in the index, he said. “The index is trading well above the 50-day SMA, indicating bullishness. The expansion of the outer Bollinger band also indicates bullishness in the index. Options writer’s data for the monthly expiry showed increased writing of the calls at the 24,800 level and increased writing in the ITM PUT of the 24,800 level, indicating bullishness in the index,” Dwarakanath said.
What should traders do? Here’s what analysts said:
Rupak De, LKP Securities
The sideways trend continued, and Nifty remained within a range. However, the index has sustained above the short-term critical moving average, suggesting a positive trend. Despite this, momentum is lacking, and a strong upside move could occur once the Nifty decisively moves above 24,700. In that case, the index might move towards 25,000. On the lower end, support is placed at 24,500.
Jatin Gedia, Mirae Asset Sharekhan
On the daily charts we can observe that the Nifty has been stuck in a narrow range 24,500 – 24,800 since the past four trading sessions. We expect this range-bound action to continue. A decisive move above 24,750 will suggest that the next leg of upward move has resumed. On the downside, 24,500 is the crucial support level and a stop loss for the long positions.
As far as derivative data is concerned, 24,500 PE and 24,600 PE added decent OI suggesting a strong support base. The highest built-up on the call side is placed at 24,700 followed by 25,000. The Nifty Weekly PCR stands at 0.71, which is unchanged from the previous session and is suggesting a slightly bearish sentiment. However, the price action suggests a range-bound price movement.
Hrishikesh Yedve, Asit C. Mehta Investment Intermediates
“Nifty began the day on a flat note and remained flat throughout the day settling at 24,642 levels. The volatility index India Vix dropped by 3.70% to 13.27 levels, indicating a decrease in market volatility. On the daily chart, the index formed a small green candle. However, the index holds above the breakout point of the inverted Head and Shoulder pattern, showing strength. On the downside, 100-Day Exponential Moving Average (100-DEMA) support is placed near 24,340. As long as the index sustains above it, traders are advised to adopt a buy-on-dips strategy. On the upside, the index might test the levels of 24,800-25,000 in the short term.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
