The next important support to be watched is around 19,550 levels, which is a weekly 10-period EMA. Minor upside bounce is to be expected from the supports, but the said bounce could be a sell-on-rise opportunity, said Nagaraj Shetti of HDFC Securities.
In terms of Open Interest (OI) data, the highest OI on the call side was observed at the 20,000 strike price, followed by the 19,900 strike price. On the put side, the highest OI was concentrated at the 19,800 strike price.
The daily momentum indicator provided a negative crossover, a sell signal, and is now in sync with the price action.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan by BNP Paribas
Nifty is in the process of retracing the rise it has witnessed 19,223 – 20,222. It has now reached the zone of 19,720 – 19,680 where support in the form of the 20-day moving average and the 50% Fibonacci retracement level is placed. We expect Nifty to hold on to this support and provide a pullback.
Rupak De, Senior Technical analyst at LKP Securities
Nifty closed below the 20-EMA, signaling a diminishing bullish sentiment. Weakness appears evident with a bearish crossover in the RSI. Selling on rallies remains the favored strategy as long as it stays below 20,000. On the downside, support is situated in the range of 19,700/ 19,630.
Shrikant Chouhan, Head of Research (Retail), Kotak Securities
Nifty has completed one leg of correction, and for the bulls now, 19700 would be the key level to watch out for. If the index succeeds in trading above the same, then we could expect one relief rally, and above 19,700 the market could rally till 19,825-19,875. On the flip side, fresh selling is possible only after the dismissal of 19700, and below the same, the index could slip to 19650-19600.
(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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