Now it has to continue to hold above 19,300 zones to extend the move towards 19,450 and 19,500 zones while on the downside support shifts higher at 19,250 and 19,100 zones, said Chandan Taparia of Motilal Oswal. Option data suggests a broader trading range between 19,100 and 19,600 zones while an immediate trading range between 19,250 and 19,500 zones.
The hourly momentum indicator triggered a negative crossover and could be the reason for Nifty not being able to sustain at higher levels.
What should traders do? Here’s what analysts said:
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The positive chart pattern like higher tops and bottoms is intact as per the daily time-frame chart and any weakness from here is likely to be a ‘buy on dips’ opportunity. On the upper side, the area of 19,450-19,500 could be a strong overhead resistance.
Rahul K Ghose, Founder & CEO – Hedged
Nifty saw huge short covering of the 19,300 call on Tuesday, which once again caused it to rally. As we get closer to the 19,500 mark on Nifty in the July expiry, expect to see some consolidation on the index. Bank Nifty is slowly seeing short straddles start to be created at the 45,500 mark for the July-end expiry. Taking the premium into account, one should not expect a run-away rally post 45500 in the very near term. It is also healthy if the indices consolidate for some time as this makes it ready for the next leg of either downside or upside depending upon the momentum.Kunal Shah, Senior Technical & Derivative analyst at LKP Securities
One should maintain a ‘buy on dips’ approach on Nifty and avoid any short position until breaks 19,200. The immediate support for the index stands at 19,300, where maximum open interest in put options data is seen and on the upper end Nifty can face resistance at 19,500 where maximum open interest in calls is seen. If Nifty breaks 19,500 levels, we can see some further upside move towards 19700.
Devarsh Vakil, Deputy Head of Retail Research, HDFC Securities
The level below 19,300 could confirm the short-term bearish trend reversal in Nifty. Bank Nifty ended the session with long-legged Doji on the daily chart and the bearish implication of the same would be activated once the index breaks below 45,000 in spot. As far as resistance is concerned, 19,500 should continue to remain a hurdle in the short term.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)