The short-term trend of Nifty continues to be choppy. The lackluster movement with weak bias is expected to continue for the next 1-2 sessions, before witnessing a sharp upside bounce from the lows. Important lower supports are to be watched around 24,100-24,000 levels and this could be a buy-on-dips opportunity. Immediate resistance is placed at 24,500 levels, said Nagaraj Shetti of HDFC Securities.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan
Nifty is undergoing a counter-trend pullback which can extend towards 24500 – 24550 which coincides with the 61.82% Fibonacci retracement level of the fall. The daily momentum indicator has a negative crossover and thus this rally is likely to fizzle out. Ideally, this rally should be sold into.
Tejas Shah, Technical Research, JM Financial & BlinkX
Nifty is making a lower low both on the daily and weekly charts, which is not a positive sign. Technically, the evidence suggests that the markets are likely to remain under pressure in the near term. The index is facing a lot of resilience around the crucial resistance of the 24,600 mark and we believe that Nifty would further outperform only if it is able to decisively close above this resistance level or else the current correction or consolidation is likely to continue in the range of 24,200 to 24,600 levels. The short-term moving averages are also below the price action and should continue to support the indices on any decline. A level of 24,350 is the immediate support to watch out for Nifty while the bigger area of support stands at 24,150-200 levels. On the higher side, the immediate resistance for Nifty is at 24,600 levels and the next resistance is at 24,800-850 levels. Overall, Nifty is likely to consolidate or remain volatile within the 24,200–24,600 range in the near term.
Rupak De, LKP Securities
On the lower end, the index found support at the upper band of the rising channel. Also, on a closing basis, Nifty managed to hold above the 21 EMA. The trend for the short term is likely to remain sideways as long as it remains within the bands of 24,200 and 24,600. The momentum might continue to remain sideways until there is a breakout on either side. A decisive fall below 24,200 might trigger a serious correction. On the higher end, a sustained move above 24,600 might induce a fresh leg of the rally in the market.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)