Tech View: Price, momentum indicators hint at weakness in Nifty. What traders should do on Tuesday
Nifty ended 73 points lower. Nifty is currently placed at the immediate support of 10-day EMA at 19,650 levels and the important lower support of 20-day EMA is placed around 19450 levels. The said 20-day EMA has been holding for the past three months and has offered support for Nifty to witness upside bounces from it in the past, said Nagaraj Shetti of HDFC Securities.
Open Interest (OI) data indicates a build-up of fresh short positions. FIIs were seen liquidating long positions in index futures as indicated by the Long-Short Ratio. Volume profile indicates Nifty has strong support around the 19,550-19,475 zone.
On the call side, the highest OI was observed at 19,800 followed by 19,900 strike prices while on the put side, the highest OI was at 19,500 strike price. On the other hand, Bank Nifty has support at 45,400-45,500 while resistance is placed at 46,250-46,370 levels.What should traders do? Here’s what analysts said:Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas On the daily charts, Nifty is retracing the rise from 19,303-19,992. Currently, it is around the 50% Fibonacci retracement level and is expected to attract buying interest.
The daily momentum indicator has triggered a negative crossover, which is a sell signal. Both price and momentum indicators are indicating weakness. However, we are still of the opinion that this is a dip that should be bought into as the overall uptrend is still intact.
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