Tech View: Nifty closes above 21 EMA. What Traders Should Do on Thursday
Ashwin Ramani, derivatives and technical analyst at SAMCO Securities, said call writers (bears) are closing with additional PUT writers at all strikes from 21,500 to 22,200, which led to a sharp recovery in Nifty on Wednesday.
“Strong put selling was observed at the 22,200 and 22,400 strike prices of the index. Call and put writers fought fiercely at the 22,500 strike price and the options activity in this exercise will provide clues about the intraday direction of Nifty. “He added.
What should traders do? Analysts said:
Jatin Gedia and Sharekhan of BNP Paribas
Nifty witnessed a widening gap and after some initial volatility, it stabilized and rose slightly to close with a gain of 736 points. Nifty closed above its short-term moving average of 22,514, which is a positive sign. The intraday range of motion was large and above normal. Scope-limiting work is expected to continue. In the near term, the range is likely to be 21,300-23,000. India VIX fell 30% on Wednesday, closing around 19:03 and is expected to cool further as uncertainty decreases.
Rupak De, LKP Securities
The Bank Nifty index made a sharp recovery from the 200-day moving average and closed above the rising trend line and the 21-day EMA. This suggests a buy strategy with a stop loss at 47,500. Immediate support is at 47,800 and resistance is at 49,500.
Neeraj Sharma, Asit C Mehta Investment Intermediates
Technically, the index crossed the hurdle of the 100-day exponential moving average (100-DEMA) and formed an Insider Bar candlestick pattern on a daily basis. 100-DEMA is placed near the 22,050 level. The bullish momentum will continue as long as the index remains above 22,050. On the other hand, in the short term, 23,000 and 23,350 are expected to act as resistance levels.
(Disclaimer: Recommendations, suggestions, views and opinions provided by experts are their own. They do not represent the views of The Economic Times.)
