A reasonable negative candle formed on the Nifty daily chart on Monday with a minor upper shadow. Technically, this pattern indicates a breakout attempt on the downside of the immediate support around the 23,000 level. This may not be a good sign and indicates short-term weakness. Negative chart patterns like upper and lower bottoms are intact on daily charts.
NIFTY’s short-term trend remains negative. The market is currently sitting at support around the 22,700-22,650 level (close to the 38.2% Fibonacci retracement). According to Nagaraj Shetti of HDFC Securities, immediate resistance is at the 23,000 level.
According to Open Interest (OI) data, the highest OI on the call side was observed at strike prices of 23,000 and 22,900, while on the put side, the highest OI was at 23,900 followed by the 22,800 strike price.
What should traders do? Here’s what the analyst said:
Mandar Bhojane, Selection Broki
On the technical front, Nifty broke from its 10-day consolidation phase and closed near the key support level at 22,800. This indicates strong bearish momentum in the market. If the index remains below 22,800, further corrections can correct it towards the 22,500 and 22,200 levels. On the upside, immediate resistance is seen at 23,100 and 23,300, where the highest call open interest (OI) is concentrated. Failure to breach these resistance levels could sustain the bearish trend. Investors are advised to closely monitor key support and resistance levels, as a breach above 22,800 or a breakout above 23,100 on the downside could determine the next directional move.
Lemon Market Desk, Satish Chandra Alluri
Benchmark indexes extended their losses and fell sharply on Monday. Technically, the Nifty 50 has broken the crucial 23,000 level and is currently holding above the 22,800 level, acting as immediate support.
Rupak de, LKP Securities
The index has slipped from its recent consolidation into the daily charts, increasing pessimism across the Indian stock market. Sentiment could favor a bearish trade in the short term, especially as long as the index remains below 23,000. On the downside, the general weakness could potentially drop to 22,500.
