Tech View: Nifty shows small body candle formation. How should one trade on Tuesday?
benchmark indices ended in red for the second session in a row dragged by FMCG and auto stocks. While the S&P BSE Sensex settled at 81,508.46, down by 200.66 or 0.25%, the broader Nifty50 closed at 24,619, lower by 58.80 or 0.24%.
Commenting on the day's action, Dr. Praveen Dwarakanath, Vice President of Hedged.in, said that momentum indicators continue to show bullishness in the Nifty index despite remaining closer to the overbought levels. «Nifty is consolidating near its resistance level of 24,850. The last two days have shown an insider candle for the index, indicating it has lost momentum. The index trades above the 50-day moving average, indicating that bullishness could continue. Options writer's data for the monthly expiry showed increased writing of the calls and puts at the 24,700 level, indicating a range-bound move in the index,» Dwarakanath said.
What should traders do? Here’s what analysts said:
Jatin Gedia, Mirae Asset Sharekhan
On the daily charts we can observe that the Nifty has been consolidating after the sharp upward move in the previous week. We expect the Nifty to consolidate before resuming its upward move. Dips towards support zone 24,550–24,500 should be considered as a buying opportunity. As far as derivative data is concerned, 24,700 CE and 24,600 PE added decent OI suggesting a range bound price action going ahead. The Nifty Weekly PCR stands at 0.75, suggesting a slightly bearish sentiment. However, the price action suggests a range bound price action to continue. The undertone
