Nifty experienced a decrease in value on Wednesday, ending a two-day upward trend, as late-session selling negated earlier gains. This decline was largely attributed to profit-taking within the banking sector, which had been strong performers in the preceding days.
On Wednesday, Nifty formed a small red candle near the 100-Day Exponential Moving Average (DEMA), indicating significant resistance in the 24,470-24,500 range. According to Hrishikesh Yedve of Asit C. Mehta Investment Interrmediates, if the index manages to stay above 24,500, it could potentially advance to the 24,600–24,700 level, with 24,070 serving as a crucial support point. Maintaining a position above this level suggests that a “buy on dips” strategy may be appropriate.
In terms of open interest (OI) data, the highest OI on the call side was recorded at the 24,500 and 24,400 strike prices, with the put side seeing the highest OI at the 24,300 strike price, followed by 24,200.
Analyst insights included those from Jatin Gedia of Sharekhan, who noted that Nifty opened lower on Wednesday and displayed volatile movements throughout the day, closing down 126 points. The daily charts revealed that Nifty has been confined within a 24,500 – 24,070 range over the past five trading sessions. Gedia suggests this range-bound behavior is likely to persist due to the upcoming monthly expiry of October derivative contracts, with more distinct price movements expected thereafter. Critical support levels identified include 24,200 – 24,180, while resistance is observed at 24,500 – 24,550.
Rupak De of LKP Securities remarked that on the hourly chart, Nifty faced resistance around the 50 EMA, resulting in a correction towards 24,300. The sentiment is expected to remain sideways so long as Nifty stays within the 24,250 to 24,500 range. A clear breakout from this range could establish a new trajectory for Nifty. Lower support levels are at 24,250 and 24,000, with resistances set at 24,500 and 24,750.
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