Nifty predictions July 31: Index likely to consolidate; Bank Nifty may find crucial support at 45,250 level
Also Read: Gift Nifty, rally in Asian markets and US stocks to Japan’s policy tweak - key triggers for Indian stock market today The Nifty rollover was near 84%, which is significantly higher compared to last month and its three months average of 76.87%. The high rollover along with high roll premiums (~181 points) suggests that long positions which were built in July series are getting carried forward into the August series, ICICI Direct said. Nifty declined on Friday, but showed decent upside recovery to close the day off the lows at 19,646.05 level.
On the weekly basis, Nifty fell 0.5% over the week after gaining for the previous four weeks. The index formed a small candle on the daily chart with lower shadow, indicating the formation of doji type candle pattern. “Normally, such doji pattern formation post reasonable upmove and down moves calls for caution for impending reversals.
Hence, this doji pattern formation after one session of decline on Friday signals the possibility of minor upside bounce in the short term," said Nagaraj Shetti, Technical Research Analyst, HDFC Securities. Shetti believes Nifty continues to be in a short term downward correction and this consolidation is likely to continue for next week. According to him, 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. Also Read: Buy or sell: Vaishali Parekh recommends three stocks to buy today — 31st July Bank Nifty index declined over 200 points to end at 45,468.10 on Friday, below the key support level of 45,600. The index started the August series with relatively lower open interest compared to its July month.
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