Having moved into the oversold region, there are chances of an upside bounce occurring from the lows. A decisive move below 18,800 levels could open the next downside of 18,500-18,600 levels in the near term, said Nagaraj Shetti of HDFC Securities.
Open Interest (OI) data showed that on the Call side, the highest OI was at 19,000 followed by 19,100 strike prices, while on the Put side, the highest OI was at the 18,500 strike price.
What should traders do? Here’s what analysts said:
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Technically, a bearish candle on daily charts and weak intraday formation indicating further weakness from the current levels. As long as the index is trading below 19000, the weak sentiment is likely to continue till 18800-18725 levels. On the flip side, one relief rally is possible only after the dismissal of 19000 and above the same, the index could move up till 19100-19150.
Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas
Considering that Nifty has reached a support zone and is appearing oversold on the hourly charts, we can expect a pullback till 19,000 – 19,050; however, it is likely to be only a temporary pause in the overall downtrend. On the downside, the Nifty is likely to drift towards 18,500 levels in the short term and the intermediate pullbacks should be used as a selling opportunity. In terms of levels, 18,700 – 18,650 shall act as a crucial support zone, while 19,000 – 19,050 is the immediate hurdle zone.
Rupak De, Senior Technical analyst at LKP Securities
The bearish crossover in the momentum indicator also supports the negative momentum. In the current scenario, supports are appearing very fragile and vulnerable. Despite the recent sharp decline, further correction from the current level seems highly possible. Support on the lower end is visible at 18,600-18,645, while resistance is positioned at 18,950-19,000.
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(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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