Positive chart pattern like higher tops and bottoms is intact on the daily chart and present consolidation/weakness is in line with the formation of new higher bottoms of the sequence. The bottom reversal needs to be confirmed at the lows. A slide below the immediate support of 21500 could open some more weakness for the near term. A sustainable move above 21840 could bring bulls back into the action, Nagaraj Shetti of HDFC Securities said.
Open Interest (OI) data showed the highest OI on the call side at 21,800 level, followed by 22,000 strike prices. On the put side, the highest OI was observed at 21,500 strike price. This data provides insights into the levels where options traders have the greatest exposure.
The Relative Strength Index (RSI) which settled at the 72 level indicates a marginal loss of momentum.
What should traders do? Here’s what analysts said:
Rupak De, Senior Technical Analyst at LKP Securities
A bearish candle has emerged on the daily Nifty chart, indicating a potential bearish trend in the near future. Sentiment is expected to stay bearish as long as it remains below 21750. Any upward movement toward 21750 could encounter selling pressure. However, a clear breakout above 21750 could shift sentiment in favor of the bulls. Support is established at 21500 on the lower end.
Ajit Mishra, Religare Broking
The underperformance of the banking majors is largely weighing on the sentiment amid consolidation and a decisive close above 21,800 in Nifty would prompt the next leg of the up move. Meanwhile, we feel it is prudent to prefer defensive viz. FMCG, pharma and stay selective in others.(You can now subscribe to our ETMarkets WhatsApp channel)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
