This pattern signals robust buying interest at lower levels, suggesting potential bullish momentum ahead. The index held its critical monthly support at 23,100, reaffirming its strength. On the upside, immediate resistance is now seen at 23,300, with a breakout above this level likely paving the way for targets of 23,600 and 23,800 in the near term, said Mandar Bhojane, Research analyst at Choice Broking.
According to the open interest (OI) data, the highest OI on the call side was observed at 23,300 and 23,200 strike prices, while on the put side, the highest OI was at 23,000 strike price followed by 23,100.
What should traders do? Here’s what analysts said:
Jatin Gedia, Mirae Asset SharekhanOn the daily chart, we can observe that the Nifty witnessed recovery from the psychological support level of 23,000. The recovery was led by HDFC Bank, which recovered sharply from intraday lows. Going ahead we expect the recovery process to continue towards 23,400. Daily and hourly momentum indicators have a positive crossover, which is a buy signal. Thus, both price and momentum indicators point towards the continuation of the positive momentum which started on Wednesday. A breach below the support zone of 23,050 – 23,000 shall lead to a decline towards 22,670. Overall, our bias tilts towards a pullback over the next few trading sessions.
Vatsal Bhuva, LKP Securities
On Wednesday, Nifty took support near its previous session low of 22,980 and formed a hammer tweezer bottom candlestick on the daily chart, signalling potential recovery toward 23,350 levels after Tuesday’s decline. However, sustained bullish momentum will only emerge if Nifty closes above 23,500, where the 21-day EMA is positioned. Until then, a cautious approach is advised. Short-term traders can focus on the 23,000–23,350 range, with 23,000 providing strong support and the 23,350–23,400 zone acting as a key resistance for the index.
Nagaraj Shetti, HDFC Securities
A small positive candle was formed on the daily chart on Wednesday with a lower shadow. Technically, this market action indicates an upside bounce from the lows. Though Nifty closed higher on Wednesday, the overall market breadth deteriorated and the broad market indices have closed sharply lower. The negative chart pattern like lower tops and bottoms is still intact. The underlying trend of Nifty remains weak and the market seems to have shifted into a broader range of 23,000-23,400 levels. A decisive move above the hurdle of 23,400 could open renewed buying participation in the market. However, a slide below 22,975 could open more weakness down to 22,800 ahead.
Praveen Dwarakanath, Hedged.in
The Nifty index took support from the lower Bollinger band and bounced, owing to the HDFC results. The index also took support from the 23,000 level, which is the immediate support for the index. The index has formed an inverted hammer candle, indicating mild bullishness. However, any bounce can be used to sell until the 23,800 level is not taken off. The momentum indicators are well below the oversold region, which can act as a reason for a bounce in the index from the current level. Options writer’s data for the January monthly expiry showed increased writing of the calls at the 23,000 and above levels, indicating a weakness still to continue in the index.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
