Tech view: Breakdown below 24,400 may open doors for 24k in Nifty. How to trade tomorrow
Nifty is currently weakening after forming a new lower top around 25,230 levels. This is a negative indication and signals ongoing downward correction.
Another crucial weekly cluster support around 24,500 (ascending trend line, 23.6% retracement and weekly 20 period EMA) is placed on the verge of a downside breakout.
The short-term trend of Nifty continues to be negative. A decisive move below 24,500-25,450 levels is likely to open the next downside target of 24,000. Any rise up to the immediate resistance of 24,700 could be a selling opportunity, said Nagaraj Shetti of HDFC Securities.
In the open interest (OI) data, the highest OI on the call side was observed at 24,600 and 24,500 strike prices, while on the put side, the highest OI was at 24,400 strike price followed by 24,300.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan
On the daily charts Nifty has slipped decisively below the 20-week average (24718) which is a sign of weakness. Daily and hourly momentum indicators possess a negative crossover which is a sell signal. Thus, both price and momentum indicators suggest weakness. On the downside, we expect the Nifty to drift towards 24000 where there is a high concentration of open interest on the put side implying support. On the upside, 24900 – 25000 shall act as a crucial resistance from a short term perspective.
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