The short-term trend of Nifty continues to be positive but given the recent run-up, traders should be prepared for correction. The next upside target to be watched at 20450 levels, which is 38.2% Fibonacci extension, taken from March bottom-July top-Aug bottom. Immediate supports to be watched at 20050, said Nagaraj Shetti of HDFC Securities.
What should traders do? Here’s what analysts said:
Rupak De, Senior Technical analyst at LKP Securities
Nifty continued to exhibit strength as the index reached new highs. Strong Put writing at 20,100 has further bolstered positive sentiment in the market. The trend is expected to remain positive as long as Nifty remains above the 20,000 mark. In the short term, there is potential for Nifty to move towards the 20,480-20,500 range on the upside.
Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas
On the daily charts, we can observe that the up move in Nifty has slowed down for the last three trading sessions. The slope of the ascent has been shallow. The reason we attribute to this price action is that it has reached the zone of 20100 – 20200 where the weekly upper Bollinger band is placed, which is resulting in subdued price action.
The hourly momentum indicator though having a positive crossover is showing signs of negative divergence, which should not be underestimated. Overall, the short-term outlook is positive. However, considering the sharp run-up for the last three trading sessions we should have a cautious stance and be prepared for a correction. In terms of levels, 20050 – 20000 is the crucial support zone while 20200 – 20250 shall act as an immediate hurdle zone.
Amol Athawale, Vice President – Technical Research, Kotak Securities
Although the larger texture of the market is bullish, the market is in temporary overbought conditions, and hence we could see some profit booking at higher levels. For short term traders, 20075 and 20000 would act as key support zones while 20300-20375 could act as crucial resistance areas for the bulls.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Download The Economic Times News App to get Daily Market Updates & Live Business News.