Momentum readings like the 14-day RSI too remain in decline mode after declining sharply from overbought levels on Wednesday. Nifty would need to cross the recent highs of 21,593 to reverse the current downtrend. Crucial supports to watch for re-emergence of weakness are at 21,232, Subash Gangadharan of HDFC Securities said.
On the derivative front, the 21300PE added the highest open interest offering immediate support.
What should traders do? Here’s what analysts said:
Kunal Shah, LKP Securities
Nifty displayed volatile movements on the last day of the week but managed to close above the crucial level of 21,300. The lower-end support for the index is positioned at 21,200, presenting a buying opportunity on any dips toward this level. Sustaining above 21,300 could pave the way for further upside momentum, targeting the 21,500 level.
Ajit Mishra, Religare Broking
The last two days of the rebound in the index have eased pressure and it would be a healthy consolidation if Nifty spends some time around the current levels. We are seeing volatility across sectors, so traders should maintain extra caution in stock selection and overnight risk management. And, we feel it is prudent to stick with index majors over midcap and smallcap counters.
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