Nifty index formed a red candle on the daily chart on Wednesday and has remained below the 100-day exponential moving average (100-DEMA), indicating weakness. However, currently, the index is placed near the lower end of a consolidation zone.
If the index manages to hold Wednesday's low of 24,150, a pullback to 24,350 is feasible; however, for a substantial up move, the index must sustain above the 100-DEMA, which is placed near 24,360. As long as the index is below 24,360, traders should adopt a cautious approach, said Hrishikesh Yedve of Asit C. Mehta Investment Interrmediates.
Open interest (OI) data reveals significant call writing at 24,300 and 24,400 strikes, indicating resistance. Meanwhile, heavy put writing at 24,200 and 24,100 suggests strong support levels.
On the daily charts, we can observe that the Nifty is broadly consolidating within a range of 24,100 – 24,350 since the last three trading sessions. We expect this consolidation to continue as the hourly momentum indicator still has a negative crossover and the still away from the equilibrium line. On the downside, 24,160 – 24,140 is a strong support zone. On the upside, 24,350 – 24,400 is the immediate hurdle.
Nifty witnessed selling pressure during the day, leading to a close below 24,200. The sentiment appears weak and could worsen if the Nifty sustains below 24,200. A decisive fall below 24,200 may trigger a correction towards 23,850 in the short
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