Headline index Nifty on Thursday ended 17 points lower to form a small Spinning Top candle on the daily chart.
The overall chart pattern indicates buy-on-dips opportunity for the short term. A decisive move above the hurdle of 19,850 levels could open the next round of sharp upside momentum for the market ahead, said Nagaraj Shetti of HDFC Securities.
The hourly momentum indicator has a negative crossover which can lead to more consolidation. On the Call side, the highest OI was observed at 19,900, followed by 20,000 strike prices while on the put side, the highest OI was at 19,800 strike price.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan by BNP Paribas
On daily charts, we can observe that Nifty has been consolidating after a sharp rally of about 350 points in the previous couple of trading sessions. This consolidation is a healthy sign and shall set the floor for the next leg of an upmove. On the downside, the gap area formed in the range 19718 – 19757 is likely to act as a short-term support, and on the upside, the rally has the potential to extend to 19,884 – 20,030.
Rupak De, Senior Technical Analyst at LKP Securities
We can expect the market to continue this range-bound movement until Nifty makes a decisive breakout either above 19,850 or below 19,750. A clear breakout above 19,850, could potentially propel the Nifty towards the 20,000 level.
Shrikant Chouhan, Head of Research (Retail), Kotak Securities
After a muted opening, Nifty witnessed a rangebound activity near the 20-day SMA (Simple Moving Average) and formed a small candlestick formation. For traders, 19,750-19,700 would be key support levels while 19,850-19,900 would act as important resistance areas.
(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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