For the day, the opening level proved to be the day’s higher point, as the index tested 16,400 level only to weaken before recovering some of the lost ground. Analysts said the recovery was seen after the index tested its 13-day simple moving average (16400). They noted that the index did not violate the preceding session’s low at 16,376 level.
“As long as Nifty50 sustains above the said low, it can be expected to remain sideways in the 16,6360-16,400 range. Strength in the index shall not be expected unless it closes above 16,650 level,” said Mazhar Mohammad of Chartviewindia.in.
The 50-pack index closed at 16,496.45, up 45.95 points or 0.28 per cent. A relatively narrow ranged body is a sign that market is getting nervous as the August F&O expiry draws near, said independent analyst Manish Shah.
“The trendline drawn from the lows of July to mid of August is getting tested. There is also a confluence of Fibonacci retracements at 61.8 percent of prior swing points. As long as the Nifty50 support of 16,350 holds, we assume the trends to be up and running. Once the index breaks above 16,580, the index may rally towards 16,780-16,800 by the expiry. As the line of least resistance is bullish, this upcoming F&O expiry could be in favor of the bulls,” Shah said.
Rohit Singre of LKP Securities said the index seems to is forming a fresh consolidation zone in the 16,350-16,600 range. “Traders can use this same range for trading purpose. The immediate index support is placed in 16,450-16,400 range while resistance is seen in the 16,550-16,600 zone,” said Singre.
