A decline below 19850 levels could confirm a short-term top reversal pattern for the market. Any upside rally from here could find strong resistance around 20100 levels, said Nagaraj Shetti of HDFC Securities.
OI data indicates that on the call side the highest OI was witnessed at 20100 followed by 20200 strike prices while on the put side, the highest OI was at 19900 followed by 19800 strike price. Nifty Put Call Ratio stood at 1.18.
Momentum indicators on the daily and hourly time frames are providing divergent signals which could lead to sideways consolidation.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan by BNP Paribas
The short-term outlook is positive and this consolidation is likely to be used as a buying opportunity. In terms of levels, 19865 – 19810 is the crucial support zone, while 20200 – 20250 shall act as an immediate hurdle zone.
Rupak De, Senior Technical analyst at LKP Securities
Nifty witnessed a correction as sellers exerted pressure around the 20100 level. However, the correction was contained, thanks to put writers at 19900 who helped shield the market from further declines. In the short term, the headline index Nifty is expected to maintain its strength as long as it stays above the critical short-term support level of 19780. On the higher end, a decisive move above 20100-20150 could propel Nifty toward 20500 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)
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