Commenting on the day’s action, Dr. Praveen Dwarakanath, Vice President of Hedged.in, highlighted that Nifty exhibited strength taking support from the middle of the Bollinger band after a sudden fall during the day.
“The momentum indicators on the hourly chart, after a drop of below 50 levels, show a rise, also indicating positive sentiments in the index. The index formed a candle with a bullish closing, indicating the momentum to continue towards the next resistance at 23,800 levels. Options writer’s data for the weekly expiry showed increased writing of puts at the 23,300 and below levels and increased writing of calls at the 23,500 and above levels, indicating a range bound index,” Dwarakanath.
What should traders do? Here’s what analysts said:
Jatin Gedia, Mirae Asset SharekhanNifty opened the gap down and thereafter consolidated during the day to close down 121 points. On the daily charts, we can observe that the Nifty is in the process of retracing the rise it has witnessed from 22,786 – 22,632. The crucial support zone comes in at 23,250 – 23,209, which coincides with the 20-day average and the 50% Fibonacci retracement level. We expect the index to hold on to this support zone and resume its upward move towards 23,820 – 24,000 from a short-term perspective. On the upside, the immediate hurdle is placed at 23,560 – 23,630 where resistance in the form of the 40-day average and the previous swing high is placed.
Rupak De, LKP Securities
The Nifty remained volatile before closing on a negative note. On the daily chart, the index managed to close above the critical 21EMA; however, sentiment appears fragile, and support may be broken in the near term. On the lower end, support is placed at 23,200/23,100, while on the higher end, resistance is placed at 23,400.
Hrishikesh Yedve, Asit C. Mehta Investment Interrmediates
Technically, despite high volatility, Nifty defended its 21-Day Simple Moving Average (21-DSMA) support and formed a hammer candle on a daily scale, indicating strength. The 21-DSMA is placed near 23,270 levels, which will act as immediate support for the index followed by 23,000 levels, while 23,640 will serve as short-term resistance. As long as the index holds 23,000, traders are advised to follow a buy-on-dips strategy.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
