Nifty ended 33 points higher on Thursday's expiry, the index formed a spinning top-like pattern on the daily chart suggesting the possibility of the formation of a short-term top.
However, having placed this candle pattern within a narrow range of 20,150-19,950 levels, the chances of further consolidation movement is likely in the short term, analysts said.
Any decline from here could drag the Nifty towards the immediate support of around 19950 levels. A decisive up move above 20200 levels is expected to pull Nifty towards another hurdle of 20450 levels, said Nagaraj Shetti of HDFC Securities.
Open Interest (OI) data reveals that the highest OI for calls is at 20,200, followed by 20,300 strike prices.
On the put side, the highest OI is at 20,100, followed by the 20,000 strike price. The Nifty Put Call Ratio stands at 0.90.
Meanwhile, Bank Nifty has support around 45,720 levels and faces resistance at 46,300.
What should traders do? Here’s what analysts said:
Rupak De, Senior Technical analyst at LKP Securities
Nifty remained range-bound throughout the day as the index failed to deliver any decisive breakout from the recent range. The «buy on dips» strategy is expected to be the preferred approach until the Nifty falls below 19,900 decisively.
On the upside, call writers at 20,100 are likely to defend the index against further upward movement. A sustained trade above 20,100 could potentially trigger a significant rally in the short term.
Shrikant Chouhan, Head of Research (Retail), Kotak Securities On intraday charts, the market is holding a higher bottom formation, indicating that the uptrend wave is likely to continue in the near future.