After the positive chart pattern like higher tops and bottoms on the daily charts, Nifty seems to have formed a new lower high on Thursday, which reflects ongoing downward correction in the market. This is also suggesting a possibility of selling pressure emerging on any upside bounce from here, said Nagaraj Shetti of HDFC Securities.
FIIs squared off long positions in index futures as indicated by the long-short ratio. The momentum indicator has a negative crossover, which is a sell signal and thus the pullbacks shall be difficult to sustain.
What should traders do? Here’s what analysts said:
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
Nifty continues to be in a short-term downward correction and this consolidation is likely to continue for next week. Any upside bounce from here could encounter strong resistance around 19,750-19,800 levels. The next crucial lower supports to be watched are around 19,500-19,450 levels.
Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities
Nifty is expected to find support around 19,500 zones, which coincides with the 20-Day Exponential Moving Average (DEMA) of 19,526 on the daily chart. A close below 20 DEMA can result in profit booking as well as initiation of fresh short positions. Nifty needs to close above 19,800 for the uptrend to continue.Bank Nifty closed below the key zone of 45,600 on the daily chart. It, however, found intraday support from the 20 DEMA, which is placed at 45,331 on the daily chart. A close below 45,300 is likely to intensify selling pressure while close above 45,700 can lead to resumption of an uptrend.
Rupak De, Senior Technical analyst at LKP Securities
Nifty remained range-bound for the day, while finding a support at 21-EMA. From the current level until Nifty breaks below 19,550 no directional down move is expected or the market may not favour aggressive shorts. On the other side, below 19,550 the index may fall towards 19,300. Resistance on the higher end is placed at 19700.
Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas
Overall, the short-term outlook remains range-bound between 19,500 and 20,000. Crucial support levels to keep handy are 19,540-19,500 and on the upside, 19,700-19,720 is the immediate hurdle zone.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)