Commenting on the day’s action, Dr. Praveen Dwarakanath, Vice President of Hedged.in said Nifty is picking momentum on the upside after a fall of more than 12% from its all-time high levels. “The index closed above its previous day’s high, indicating mild bullishness in the index. The momentum indicators are well below the oversold region, which can act as a reason for a bounce in the index from the current level. Options writer’s data for the January monthly expiry showed increased writing of the calls and puts at the 23,400 and above levels, indicating a range-bound move in the index,” Dwarakanath said.
What should traders do? Here’s what analysts said:
Om Mehra, SAMCO SecuritiesOn the daily chart, the index formed a bullish hammer pattern, suggesting a potential change in trend. After a phase of consolidation and base formation around the 23,150–23,200 zone, Nifty appears to be gathering momentum for an upward move. The RSI on the hourly chart has rebounded from lower levels, showing a positive divergence that further strengthens the bullish outlook. The MACD momentum indicator, with its narrowing histogram, suggests a reduction in bearish pressure, indicating the potential for consolidation or a minor pullback.
Nifty is approaching the resistance zone at 23,400. A breakout above this level could open the door for an extended rally toward 23,550–23,570 levels, further confirming bullish momentum.
Rupak De, LKP Securities
The Nifty remained volatile before closing at a six-day high, indicating an improvement in sentiment. In the short term, the index might rise towards 23,450. A decisive move above 23,450 could trigger a rally towards 23,800/24,000. Support on the lower end is placed at 23,150.
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