The sell-off in the index suggests that it is still good to be sold on the rise. Immediate resistance for the index is at the 23,100 level, and support is at the 22,850 level. The momentum indicators continue to be below the oversold region, which can be a possible reason for a dead cat bounce. Options writer’s data for the January monthly expiry showed increased writing of the puts at the 23,000 and above levels, indicating support for the index, said Praveen Dwarakanath of Hedged.in.
According to the open interest (OI) data, the highest OI on the call side was observed at 23,000 and 23,200 strike prices, while on the put side, the highest OI was at 23,000 strike price followed by 22,900.
What should traders do? Here’s what analysts said:
Satish Chandra Aluri, Lemonn Markets DeskBenchmark indices staged a relief rally on Tuesday from Monday’s sharp losses while broader mid and smallcap indices extended their declines as they continued to underperform on valuation and earnings concerns. The market opened positive and gradually recovered throughout the afternoon reclaiming the 23,000 level before erasing some of the gains in the last hour of trading to settle below the 23,000 level. What we witnessed on Tuesday is a marginal relief rally helped by buying interest in some of the big banks which delivered decent earnings while the overall core trend remains downside for the market. Technically, the Nifty 50 despite the rebound closed below the crucial 23,000 level and expects the 22,800 level to act as immediate support.
Rupak De, LKP Securities
The Nifty remained volatile throughout the session before closing below 23,000, reinforcing bearish sentiment in the market. In the near term, the index is likely to remain under bearish control as long as it stays below 23,000 on a closing basis. On the downside, immediate support is placed at 22,800, and a breach below this level could lead to a decline toward 22,500. Conversely, a close above 23,000 might provide some short-term relief to the market.
Nandish Shah, HDFC Securities
After two consecutive days of decline, Nifty experienced a relief rally. Following a gap-up opening of 131 points, Nifty continued to rise, reaching 23,137, which marked an intraday increase of over 300 points compared to the previous day’s close. However, after 2:45 P.M., Nifty sharply corrected by 227 points to 22,910 from the day’s high. Support for Nifty is placed at 22,786, while immediate resistance is seen at 23,137 followed by 23,347.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
