Nifty has formed another doji candle within the range of the last five days, which indicates indecisiveness in the index, said Dr. Hedged.in Vice President. Praveen Dwarakanath commented on the day’s actions.
But momentum indicators continue to show strength in the index, he said. “The index is trading well above its 50-day SMA, indicating strength. The expansion of the outer Bollinger bands indicates strength in the index. Data from options writers for monthly expirations shows increased writing of calls at 24,800 level and increased writing of ITM PUT at 24,800 level, indicating strength in the index,” Dwarakanath said.
What should traders do? Analysts said:
Rupak De, LKP Securities
The sideways trend continued and Nifty remained range-bound. However, the index is above the short-term critical moving average, suggesting a positive trend. Nonetheless, momentum is lacking and a strong uptrend could emerge if Nifty decisively crosses 24,700. In this case, the index may move towards 25,000. At the bottom, support is located at 24,500.
Jatin Gedia, Mirae Asset Share Khan
Looking at the daily chart, we can see that Nifty has been stuck in a narrow range of 24,500-24,800 since the last four trading sessions. We expect this scope-limiting work to continue. A decisive move above 24,750 would mark the resumption of the next uptrend. On the downside, 24,500 is an important support level and a stop loss point for long positions.
As for derivative data, 24,500 PE and 24,600 PE added a decent OI, suggesting a strong support base. On the call side, the highest accumulation is 24,700, followed by 25,000. Nifty Weekly PCR is unchanged from the previous session at 0.71, suggesting slightly bearish sentiment. However, price action implies range-dependent price movement.
Hrishikesh Yedve, Asit C. Mehta Investment Intermediates
“Nifty started the day flat and remained flat throughout the day, settling at 24,642 levels. India Vix, a volatility index, fell 3.70% to 13.27, showing a decrease in market volatility. On the daily chart, the index formed a small green candle. However, the index is showing strength, staying above the breakout point of the inverse head and shoulders pattern. On the downside, the 100-day exponential moving average (100-DEMA) support is near 24,340. As long as the index stays above that, traders are advised to adopt a buy on dips strategy. On the positive side, the index may test the 24,800-25,000 level in the near term.(Disclaimer: Recommendations, suggestions, views and opinions provided by experts are their own. They do not represent the views of The Economic Times.)
