The underlying tone of Nifty remains negative. Having recently fallen below the key support 25,100-25,000 level, Nifty may fall towards lower support near 24,500-24,400 in the near term. HDFC Securities’ Nagaraj Shetty said he sees immediate resistance at the $25,000 level.
In the open interest (OI) data, the highest OI on the call side was observed at strike prices of 25,000 and 25,100, while on the put side, the highest OI was at strike price of 24,500, followed by 24,700.
What should traders do? Analysts say:
Jatin Gedia, Sharekhan Daily chart shows that Nifty has declined since the last 6 trading sessions, correcting around 1500 points from its high of 26277. It has now reached the 61.82% Fibonacci retracement level of the previous bull market at 24800. This could serve as an important level to watch over the next few trading sessions. The short-term target of 24,800 has been achieved, so we will adjust downward to the 20-week moving average of 24,500. In terms of upside, the immediate hurdle will be 25125-25200 in the short term.
Hrishikesh Yedve, Asit C Mehta Investment Intermediates
Technically, the index formed a red candlestick on the daily chart, indicating weakness. However, the index managed to defend the 24,750 level, giving some relief to the bulls. As long as the index remains within the 24,700-24,750 range, a short-term rebound is possible. However, if Nifty remains below 24,700, a more severe decline could follow.
Rupak De, LKP Securities
Nifty further declined on continued geopolitical concerns, with sentiment deteriorating as the index fell below the 55 EMA, indicating a bearish trend. A bearish crossover in the RSI is increasing the downward momentum in prices. In the short term, trends may remain volatile with a predominantly bearish outlook. Overall, the market appears to be “trending up” as long as it stays below 25,000. On the downside, support levels are located at 25,700, 25,590, and 25,400.
Praveen Dwarakanath, Hedged.in
Nifty closed with important support at 24800 level. All momentum indicators have turned into oversold region and this is also the reason why Nifty may experience another dead cat bounce, but it will still not last long. Also, the index closed at the 20 EMA support, which could also be a reason for a small pullback. However, a weekly close below 24800 could trigger a further decline below the 24000 level. Option writer data shows a significant increase in ITM put call writing and short covering, indicating weakness in the index.
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