The Nifty faced strong selling pressure throughout the session, struggling to sustain above the immediate resistance level of 24,000. It closed below 23,700 and breached the 200-day Exponential Moving Average (EMA), signalling a bearish trend. If the index fails to hold above current levels, further corrections could lead to the next support levels at 23,270 and 23,000. However, a decisive breakout above 24,000 remains critical to revive bullish momentum, said Mandar Bhojane of Choice Broking.
According to the open interest (OI) data, the highest OI on the call side was observed at 24,000 and 24,200 strike prices, while on the put side, the highest OI was at 23,600 strike price followed by 23,300.
What should traders do? Here’s what analysts said:
Jatin Gedia, Mirae Asset Sharekhan
Nifty opened mildly in the green. It, however, witnessed follow-through selling pressure and closed down 389 points. On the daily charts, we can observe that the index could not hold on to the 200-day exponential moving average (23,700) and has again closed below that. The inability to hold and sustain above it indicates signs of weakness. We expect the Nifty to consolidate within a range of 23,500 – 24,200 from a short-term perspective. The daily momentum indicator has a positive crossover. However, the price is not showing corresponding strength and hence we shall assign more weightage to the price action and trade accordingly.
Satish Chandra Aluri, Lemonn Markets Desk
The markets are back to the recent sell-on-rally trend, which reflects cautious investor sentiment, with bulls unable to sustain momentum. Any durable market recovery hinges on positive Q3 results and growth- supportive measures from the Budget. Technically, Nifty 50 broke key support levels and can test recent lows around 23,200-23,300 if selling persists. On the upside, Nifty 50 may face resistance around 24,000.
Nandish Shah, HDFC Securities
The recent upside breakout of the range has been negated and the Nifty slipped below the crucial 200-day EMA again at 23,700 levels for the third time. Hence, the next support of 23,500-23,400 levels could be in danger of violation. The short-term trend of Nifty is weak and one may expect some more weakness in the coming sessions. The next lower supports are seen in the vicinity of 23,460 and 23,260 levels. Any upside bounce could find a hurdle around 23,800.
Hrishikesh Yedve, Asit C. Mehta Investment Interrmediates
Technically, on the daily chart, Nifty formed a big red candle, indicating heavy selling pressure. As a result, the index has broken the 200-day Simple Moving Average (200-DSMA) of 23,900. Thus, the index will face an immediate obstacle around 23,900-23,910. On the downside, the index held 250-DSMA support near around 23,500 levels. A short-term pullback is probable if the index maintains above 23,500; however, if the index slides below 23,500, weakness may intensify.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
