The candlestick (Hammer) pattern formed on the weekly chart is an encouraging one. The broader markets also outperformed as compared to the mainline indices. India VIX witnessed a sharp rally to the levels of 16.10 (up by 8.93%).
The key takeaway for Nifty is that it is bouncing back from the lower levels and is also holding above 200 Day Exponential moving average on a weekly closing basis, which is currently placed at around 23,500 mark. As long as Nifty is holding above 23.5 K, the present pullback rally which started recently is likely to continue. Support for Nifty is now seen at 23,650 and 23,500. On the higher side, immediate psychological resistance for Nifty is at 24,000 mark and the next resistance zone is at 24,200-250 levels, said Tejas Shah, Technical Research, JM Financial & BlinkX.
In the open interest (OI) data, the highest OI on the call side was observed at 24,000 and 24,100 strike prices, while on the put side, the highest OI was at 23,900 strike price followed by 23,800.
What should traders do? Here’s what analysts said:
Jatin Gedia, SharekhanOn the daily charts, we can observe that Nifty surpassed the previous swing high of 23,780 and thereby reversing its short-term trend. On the upside we expect the Nifty to retrace towards 24400 with the potential to extend towards 24,730. On the downside, 23,630 – 23,560 shall act as a crucial support zone and only a dip below these levels shall make the structure weak.
Hrishikesh Yedve, Asit C Mehta Investment Interrmediates
Technically, index on a daily scale has formed a large green candle, indicating strength. Furthermore, the index crossed the 23,800 barrier and closed above it, confirming strength. However, the index is still placed below 21-Days exponential moving average (DEMA), which is placed near 24,040. Thus, 24,040-24,050 will act as immediate resistance for the index, while 23,800 will act as immediate support for the index. If the index manages to sustain above 24,050 then the rally could extend towards 24,200-24,300 levels. Thus, in the short term, buy on dips approach should be adopted.
Praveen Dwarakanath, Hedged.in
Nifty gave the dead cat bounce with expectations from tomorrow’s results of state elections. It has formed a bullish candle for the week, with a long wick at the bottom. Unless Nifty breaks the 24,000 level, sustainably, one should continue to hold the view of Sell on the rise. Immediate resistance for the index is at 24,000 levels. The momentum indicators on the daily were in the oversold region, which could also be the reason for the sudden bounce. Options writer’s data for the monthly expiry showed an increase in the puts at the 23500 level and a short covering of calls below the 23,00 level, which could also be the reason for today’s sharp rally.
Rupak De, LKP Securities
Finally, the Nifty witnessed a strong recovery as the index moved back above the 200-DMA, indicating an improving trend. Additionally, the Nifty has broken out of a few days of congestion on the daily timeframe. The RSI has entered a bullish crossover near the oversold zone, suggesting positive momentum. The sentiment appears favorable for a meaningful rally in the short term, as long as the index stays above 23,600. Immediate resistance is seen at 23,960–24,000. A decisive move above 24,000 could trigger a rally toward 24,500. On the downside, supports are placed at 23,750 and 23,550
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
