As Nifty ended 40 points higher, a small Doji candle was formed on the charts. The sideways movement has little predictive value.
Normally, such Doji formations after a reasonable upmove or downmove indicate trend reversals. But, having formed this pattern beside the negative candle of Friday signal range bound action in the market, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
The daily and hourly momentum indicators provide divergent signals which can lead to some consolidation over the next couple of trading sessions.
Reliance Industries, which was in focus today due to its AGM, was the biggest drag on the index.
What should traders do? Here’s what analysts said:Rupak De, Senior Technical analyst at LKP Securities
Although the trend remains weak, the failure to fall below 19,245 on a closing basis may lead to a short-term pullback in the market. The RSI has shown a bullish crossover. Support is positioned at 19,245; a decisive breach below this level could attract significant selling pressure. On the higher end, resistance is observed at 19,450.
Jatin Gedia, Sharekhan
On the daily charts, we can observe that after falling for two consecutive days Nifty held on to the support of the previous swing low placed around 19,250 and witnessed a pullback. On the upside, it faced resistance at 19,360 where resistance in the form of the 40-day moving average is placed. The pullback can continue till 19,410 – 19,450 however we expect selling pressure to emerge from that level. Overall, we shall continue to maintain our negative outlook on the index for the target of 19,100. Crucial support is placed at 19,250 – 19,230 while immediate hurdle is placed at 19,410 – 19,450.
Rahul Ghose, Founder & CEO – Hedged
Nifty saw Put writing today at 19,300 and 19,200 levels for this week’s expiry. Markets for the next few days are likely to trade between 19,000 on the downside and 19,600 on the upside. Bank Nifty’s open interest data suggests that this week’s expiry is likely to happen between 44,000 on the downside and 44,800 on the upside. We expect Bank Nifty to be the stronger Index as we go into this week’s expiry owing to a demand level being present at its current price level.
Shrikant Chouhan, Head of Research (Retail), Kotak Securities
Technically, although Nifty cleared the intraday resistance of 19,350, it failed to close above the same due to profit booking at higher levels. The index has formed a double bottom formation near the important support level, indicating a strong possibility of a pullback rally from the current levels. For day traders, as long as the index is holding 19,220, the positive sentiment is likely to continue, above which, the pullback rally till 19,400-19,450. On the other side, below 19,220, the selling pressure is likely to accelerate, and below the same the index could slip to 19,150-19,120.
(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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