The Nifty50 snapped a three-day rally on November 7, as it remained under pressure throughout the session but cut down losses in the afternoon and closed flat with a negative bias on November 7. The index managed to sustain above 19,400 for yet another session and continued to face resistance near 19,450, which coincides with the 50-day EMA (exponential moving average). If the index gets back decisively above 19,450, then 19,600 is the possible zone to watch, with 19,300 as healthy support, experts said.
The Nifty50 opened moderately lower at 19,404 and hit an intraday low of 19,329 in late-morning deals. The index immediately started recouping losses and climbed higher towards the end of the session and hit a day's high of 19,423.50. But it failed to hold those minor gains and settled with 5 points loss at 19,407, forming a Doji kind of candlestick pattern on the daily charts, indicating the tug-of-war between bulls and bears for future market trends.
"The dip towards the support zone of 19,330 – 19,300 where the key hourly moving averages were placed was bought into and the hourly momentum indicator has also triggered a positive crossover from the equilibrium line which indicates that it has started a new cycle on the upside," Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said.
It is still trading around the crucial resistance zone of 19,450 – 19,500. "A decisive close above it shall lead to a further rally upwards till 19,690. On the downside, 19,300–19,270 shall act as a crucial support zone from a short-term perspective," Gedia said.
On the weekly Options data front, the maximum Call open interest was at 19,500 strike, followed by 19,600 & 19,400 strikes, with Call writing at 19,400 strike, then 19,500 strike, while the maximum Put open interest was visible at 19,300 strike, followed by 19,400 & 19,200 strike, with Put writing at 19,400 strike, then 19,000 strike.
The above Options data also indicated that 19,500-19,600 is likely to be the key hurdle zone for the Nifty50, with 19,300 support, but in between, 19,400 seems to be crucial for either side of the trade.
The Bank Nifty fared better than the benchmark Nifty50, rising 118.5 points to 43,738 and forming a bullish candlestick pattern with a long lower shadow on the daily charts, indicating support-based buying. The index cleared the hurdle of 43,700 levels, and now all eyes seem to be on the 44,000 mark.
"The Bank Nifty exhibited volatility throughout the day before finishing with strength. The sentiment appears to be positive at this point, and the setup seems favourable for a robust upward movement in the index," Rupak De, senior technical analyst at LKP Securities said.
In the near term, he feels it may potentially move towards 44,500 on the upside, with support situated at 43,300 on the lower end.
(With inputs from agencies)