Tech View: Nifty in consolidation mood, sideways trend likely. What traders should do on Wednesday
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A decisive move below the immediate support of 10-day EMA at 19,940 levels could confirm further weakness for the near term. However, sharp selling momentum is ruled out. Immediate resistance is placed at 20,220 levels, said Nagaraj Shetti of HDFC Securities.
On the call side, the highest OI was observed at 20,200 followed by 20,300 strike prices while on the put side, the highest OI was at 20,000 strike price.
The market will remain closed on the occasion of Ganesh Chaturthi festival on Tuesday.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan by BNP Paribas
We believe that Nifty can enter a phase of consolidation where it shall retrace the recent rally it has witnessed. The daily momentum indicator has a positive crossover, which is a buy signal. Thus, this dip/consolidation is likely to be temporary in nature and the overall trend continues to be positive. In terms of levels, 20050 – 20000 is the crucial support zone while 20200 – 20250 shall act as an immediate hurdle zone.
Kunal Shah, Senior Technical & Derivative analyst at LKP Securities
Nifty has been consolidating within a broad range, with notable call writing activity observed at higher levels. This suggests that market participants are cautious and have been selling call options to hedge against potential downward movements. The sideways trend in the index is expected to persist in the upcoming trading sessions.
(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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