Nifty has been making higher highs for the last five sessions but facing some pressure and profit booking at higher zones. Now, it has to cross and hold above 18,777 zones to witness an up move towards 18,888 and 19,000 zones while on the downside support exists at 18,710 and 18,676 zones, said Chandan Taparia of Motilal Oswal.
Option data suggests a shift in broader trading range between 18,550 and 19,000 zones while an immediate trading range between 18,650 and 18,850 zones.
Since the past three trading sessions, Nifty has been witnessing large swings in both directions and thus creating volatility. Increasing volatility is a sign of top or bottom and in this case the probability turns in favour of a top, chartists maintained.
What should traders do? Here’s what analysts said:
Rahul Ghose, Founder & CEO – Hedged
Nifty Bank is playing spoilsport and preventing Nifty from reaching all-time high as a result of the head and shoulders pattern that it has on the daily chart. This pattern will get negated only when Bank Nifty crosses the 44,200 mark. Until then, Bank Nifty will remain in sideways territory and will try to bring the index down. The OI data of Nifty should be taken with a pinch of salt currently as it is rapidly changing on a daily basis. On Friday, there was heavy put writing seen, which was completely reversed on Monday with heavy call writing. The best way to play the index now is to plan for collar strategies until 18,900 gets taken out decisively.
Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
Divergent signals from the daily and hourly momentum indicators are also adding to the confusion and thus inducing volatility. Thus, we should brace up for more volatility in the coming trading sessions. Crucial support levels to keep handy are 18,650 – 18,600 and 18,880 – 18,900 is the crucial resistance level.
Shrikant Chouhan, Head of Research (Retail), Kotak Securities
On intraday charts, Nifty is holding higher high and higher low series formation, which supports further uptrend from the current level. For traders, 18,680 would act as a sacrosanct support level. Above the same, the index could retest the level of 18,850-18,900. On the other hand, below 18,680 traders may prefer to exit from the trading long positions. Below the same, the index could slip till 18,650-18,610.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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