Tech View: Nifty ends near 20-DEMA. What traders should do on Thursday expiry
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Observing the daily chart, the index has been navigating within a rising channel. A decline below 21,950 could potentially trigger a correction towards 21,800 in the near term. Conversely, a sustained trade above 21,950 might spur a recovery in the index towards 22,100, said Rupak De of LKP Securities.
A scrutiny of Open Interest (OI) data revealed that the call side displayed the highest OI at 22,000, followed by the 22,300 strike prices. On the put side, the maximum OI was observed at the 21,800 strike price.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan
The daily, as well as hourly momentum indicators, have a negative crossover, which is a sell signal. However, prices are still in a range and hence a decisive breach below 21875 i.e. the previous swing low is required to validate the change of trend. The index is around the crucial support zone 21,900, which is likely to act as a make-or-break level from a short-term perspective.
Ajit Mishra, Religare Broking
Nifty has again reached its short-term moving average i.e. 20 DEMA and a close below the 21,900 mark would change the bias. And, it may result in further deterioration in the prevailing underperformance of the broader indices. Traders should thus plan their exit in existing longs accordingly and strictly avoid averaging to the loss-making positions. For shorting opportunities, prefer the laggards from the respective sectors.
Tejas Shah, Technical Research, JM Financial & BlinkX
Nifty is still trading in the range of 22,000 to 22,300 levels for the past couple of weeks and sellers are very strong near the upper-end i. e. between 22,250 and 22,300 levels and buyers have repeatedly shown their presence near the lower end i. e. near 21,950 to 22,300 levels. We need to wait and watch for either side breakout or breakdown for 200 to 300 points directional move in Nifty. Support for the Nifty is now seen at 21,950-22,000 and 21,800-825 levels. On the higher side, immediate resistance for Nifty is at 22,050 levels and the next resistance zone is at 22,250-300 levels.
Ruchit Jain, Lead Research, 5paisa.com
Ahead of the expiry, we witnessed consistent writing in call options which too is not a positive sign. The RSI oscillator on the daily chart has also given a negative crossover and hence, the data hints at a corrective phase and hence, one should keep a cautious approach in the market. Now, the immediate support would be around the 40 DEMA, which has acted as a saviour in the recent declines.
(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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