Though, Nifty placed at the highs, there is still no confirmation of any significant reversal pattern building at the highs. Further weakness only below 23,300 levels could be considered as a short-term top reversal pattern. Further sustainable upside bounce is likely to negate this negative setup, said Nagaraj Shetti of HDFC Securities.
Open Interest (OI) data showed that on the call side, the highest OI was observed at 23,800 and 24,000 strike prices. On the put side, the highest OI was at the 23,000 strike price.
What should traders do? Here’s what analysts said:
Rupak De, LKP Securities
Nifty remained range-bound, staying broadly within 23,450 and 23,650. Sentiment continues to favor short-term bullish trades as the index sustained above the 55 exponential moving average (EMA) on the hourly chart. The short-term trend remains strong, and any dips towards the 55-hour EMA, which is currently pegged at 23,340, might get bought into. On the higher end, in the short term, the index might move towards 23,800 and beyond.
Shrikant Chouhan, Kotak Securities
On daily charts, it has formed a bearish candle, which indicates temporary weakness from current levels. However, the short-term texture of the market is still on the positive side. We are of the view that 23,450/77,100 would be the crucial support zone for the day traders; below the same, we could see one quick intraday correction till 23,350-23,300/76,800-76,600 . On the flip side, 23,660/77,850 could be the immediate breakout levels for the bulls. Above 23,660/77,850, the market is likely to move up to 23,775-23,800/78,000-78,200. The intraday market texture is non-directional hence level based trading would be the ideal strategy for the day traders.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
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