Technical View: Nifty may see consolidation with support at 24,000, Bank Nifty charts hint at caution
Technical View: Nifty may see consolidation with support at 24,000, Bank Nifty charts hint at caution
The Nifty 50 surpassed the much-awaited 24,200 level in the morning but could not sustain it due to profit-taking, closing the volatile session moderately lower on July 2. Experts expect such consolidation to continue given the tiredness at the top after a consistent upward journey. However, as long as it holds 24,000, the levels of 24,400-24,500 can't be ruled out post-likely consolidation.
The Nifty 50 opened higher at 24,229 and hit a new record high of 24,236.35, but in early trade, it wiped out those gains and turned volatile for the rest of the session. The index fell 18 points to 24,124 and formed a bearish candlestick pattern on the daily charts, although it witnessed a higher tops, higher bottoms formation.
The formation of such a small negative candle at the new highs indicates a lacklustre type movement in the market. This pattern also signals tiredness in the market at the new highs, according to Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities.
Although the overall trend of Nifty remains positive, further consolidation or minor dips from here could be a buying opportunity, as per the bullish pattern of higher tops and bottoms, he advised.
One may expect upside momentum to resume shortly after the consolidation movement, with immediate support at 23,980 and the next upside resistance to be watched around 24,400, he said.
On the weekly options front, the 25,000 strike maintained higher Call open interest, followed by 24,500 and 24,200 strikes, with maximum Call writing at 24,200 strike, and then 24,500 and 24,600 strikes. On the Put side, the maximum open interest was seen at 24,000 strike, followed by 23,500 and 23,000 strikes, with maximum writing at 23,400 strike, and then 23,800 and 23,600 strikes.
The above options data suggested that the 24,200 level is expected to be a crucial hurdle for the index, above which 24,500 is the level to watch, with support at 24,000.
Bank Nifty
The Bank Nifty lost all its previous day's gains and closed 407 points lower at 52,168, forming a Bearish Engulfing kind of candlestick pattern on the daily charts, which is a bearish reversal pattern. If the index confirms the bearishness in the following candle, then traders need to be cautious, experts said.
The index witnessed selling pressure from higher levels and faced rejection at the 52,400-52,500 levels. "The index remains in a sell-on-rise mode with the next immediate support at the 52,000-51,800 zone. If the index fails to hold this support, it can witness further selling pressure towards the 51,400-51,300 levels," Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities said.
Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.