Daily and hourly momentum indicators are pointing to a negative crossover which would be a sell signal. The key support levels are 24,265 (20-day moving average) and 24,000 (23.6% Fib retracement level). On the upside, a breakout above 24,860 could lead to a rise to 25,530, said Jatin Gedia of Sharekhan.
Volatility is expected to be high in Tuesday’s session in light of the budget announcement.
According to the open interest (OI) data, on the call side, the highest OI was observed at strike prices of 24,800 and 25,000, while on the put side, it was observed at a strike price of 24,000.
What should traders do? Here’s what analysts say:
Rajesh Bhosale, Equity Technical Analyst, Angel One
The price structure looks weak with the formation of bearish engruffing and shooting star patterns last week. Moreover, the bearish crossover of RSI smoothed in the overbought zone does not bode well for the bulls. Hence, remain cautious on the budget announcement day and refrain from aggressive long bets. This theory will be valid as long as Friday’s high of 24850 holds. On the day of the event, Nifty may experience violent fluctuations with 24850 acting as a tough hurdle followed by 25,000. On the downside, 24,200 followed by 24,000 will act as key support levels. A close significantly below these levels may trigger a much-awaited price correction in the short term. Generally, the budget session is crucial for the next phase of the trend, hence traders should closely monitor the outcome of the event in relation to the key levels at the close.
Tejas Shah, Technical Research, JM Financial & BlinkX
Nifty has bounced back from the recent support level of 24,500 and is above the same level on a closing basis as well.Price movements have been moving well above the moving averages for the past few days, which indicates stability.
Support for Nifty is currently at 24,500/24,350 and 24,200 levels. On the upside, the immediate resistance for Nifty is at 24,600-650 levels and the next resistance zone is at 24,800-850 levels. Overall, Nifty is likely to continue fluctuating within the range of 24,200-24,800 in the short term.
Rupak De, LKP Securities
On the daily chart, a bearish engulfing pattern followed by a smaller candlestick is forming, suggesting a pause before the next move. The Relative Strength Index (14) is entering a bearish crossover and breaking out of the overbought zone.
The 24,550 level is likely to be an immediate hurdle for Nifty. A move above 24,550 can trigger a significant upswing for Nifty, while support lies at 24,480. A significant drop below 24,480 can trigger selling pressure in the market.
(Disclaimer: The recommendations, suggestions, views and opinions expressed by the experts are their own. They do not represent the views of The Economic Times)
