Technically, Nifty formed a red candle on the daily scale, indicating weakness. However, the index found support near the 21-day simple moving average (DSMA), which is placed at around 23,290. On the upside, the 50-DSMA is placed around 23,740, which will act as a crucial hurdle, followed by 23,800. Sustaining below 23,290 could extend further weakness in the index. Traders should closely monitor these levels for potential opportunities, said Hrishikesh Yedve of Asit C. Mehta Investment Interrmediates.
As per the open interest (OI) data, the highest OI on the call side was observed at 23,600 and 23,500 strike prices, while on the put side, the highest OI was at 23,300 strike price followed by 23,400.
What should traders do? Here’s what analysts said:
Jatin Gedia, Mirae Asset Sharekhan
On the daily charts, we can observe that the Nifty has closed in the negative for the fourth consecutive session. It has in the process tested the 20-day moving average (23,300) which is likely to act as a make-or-break level from a short-term perspective. We expect the Nifty to hold on to this crucial support and resume its uptrend towards 24,000. The daily momentum indicator has a positive crossover, which is a buy signal, and hence this minor degree pullback towards the support zone should be considered a buying opportunity.
About Ghawalkar, Share.Market
Throughout the day, the market exhibited volatile movements, reaching a low of 23,316. In the last trading hour, it witnessed a mild recovery and closed at 23,381. Last week, Nifty faced resistance at the 50-SMA (Simple Moving Average) on the chart. On Monday, it found support near the 21-SMA, indicating a key technical level to watch. Options chain analysis suggests that the maximum call open interest (OI) is concentrated at 24,000, indicating a strong resistance level. On the other hand, the maximum put open interest (OI) is observed at 22,500, which could serve as a key support level for the market.
Rupak de, LKP Securities
The decline continues in the headline index as it has been falling after forming a lower top on the daily chart. Sentiment has weakened further after the Nifty dropped below the 21EMA. Additionally, the RSI has entered a bearish crossover. In the short term, the trend may worsen below 23,350, with the potential to fall toward 23,000 if it sustains below this level. On the higher end, resistance is seen at 23,550.
Nagaraj Shetti, HDFC Securities
A long bear candle was formed on the daily chart that has started to move below the crucial cluster supports of around 23,400 levels (10/20-day EMA and support as per change in polarity). This is not a good sign. A slide below the next support of 23,220, the bullish chart pattern like higher tops and bottoms could get nullified and that could have a more negative impact on the market. The underlying trend of Nifty remains negative. Having moved below the crucial support of 23,400, one may expect the market to slide down to 23,200 and lower in the short term. Immediate resistance is placed at 23,500 levels.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times
