Tech view: Nifty forms small red candle, faces strong resistance at 100 DEMA. How to trade tomorrow
Nifty closed lower on Wednesday after a two-day gain. A sell-off in the later half of the session erased the morning gains as the star performers of the previous two days i.e. banks came under profit-taking.
Nifty formed a small red candle on Wednesday near the 100-Day Exponential Moving Average (DEMA), signalling strong resistance around 24,470-24,500 levels. If the index sustains above 24,500, it may extend gains to the 24,600–24,700 range, with 24,070 acting as a key support. As long as it holds above this level, a «buy on dips» approach remains viable, said Hrishikesh Yedve of Asit C. Mehta Investment Interrmediates.
In the open interest (OI) data, the highest OI on the call side was observed at 24,500 and 24,400 strike prices, while on the put side, the highest OI was at 24,300 strike price followed by 24,200.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan
Nifty opened gap down on Wednesday and witnessed volatile price action during the day. It closed down 126 points. on the daily charts we can observe that the Nifty has been trading in the range of 24,500 – 24,070 for the last five trading sessions. The rangebound action in the index is likely to continue on account of the monthly expiry of October series derivative contracts. Post that we are likely to witness trending moves. Crucial support levels are 24,200 – 24,180 while resistance is placed at 24,500 – 24,550.
Rupak De, LKP Securities
On the hourly chart, Nifty encountered resistance around the 50 EMA, leading to a
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