The positive chart pattern like higher tops and bottoms is intact as per daily chart and Friday’s swing low of 19,635 could be considered as a new higher bottom of the sequence. The short-term trend of Nifty continues to be positive. A decisive move above the hurdle of 19,800-19,850 levels is likely to bring another round of sharp upside momentum for the near term. Immediate support is placed at 19,630, said Nagaraj Shetti of HDFC Securities.
The daily and hourly momentum indicators are providing divergent signals and in such a scenario a consolidation appears with high probability.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan by BNP Paribas
On the daily charts, we can observe that the zone of 19640 – 19620, where support in the form of the 40 day average was placed, acted as a cushion and prevented further decline. The rallies and corrections have been short-lived and thereby only leading to increased volatility and wild swings in both directions.
The daily Bollinger bands are contracting, which indicates that the index is due for consolidation. The range of consolidation is likely to be 19500 – 20100 from a short- term perspective. Stocks specific action and sector rotation are likely during this period of consolidation.
Rupak De, Senior Technical Analyst at LKP Securities
The bulls were able to protect the level of 19,600 during the day, thanks to the strong open interest (OI) build-up at the 19,600 strike price by put writers. The strength may continue as long as the index remains above 19,600. Only a decisive fall below 19,600 might trigger serious long unwinding in the market. Till then, a buy on dips strategy may favor the market. On the higher end, resistance is visible at 19,850; above 19,850, the index might move towards 20000.
(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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