Nifty may have hit intermediate top at 12,041; experts suggest avoid long positions
For investors, it is perfect time to accumulate quality stocks on the decline but for traders, the index is trading in so-called no trade zone.
Nifty witnessed selling pressure soon after it surpassed 12,000 and touched a fresh intraday record high of 12,041 last week on May 23. Since then, the momentum has fizzled out and the index has been flirting around 11,800-11,850.
On May 28, the index formed a ‘Hanging Man’ pattern that is a bearish reversal pattern. Formation of this pattern suggests that Nifty could have made an intermediate top around 12,000-12,041 and investors should avoid going long on the index, suggest experts.
For investors, it is perfect time to accumulate quality stocks on the decline but for traders, the index is trading in so-called no trade zone.
A break out above 12,041 would nullify the negative implication of Hanging Man formed on May 28 while a bearish candle on May 29 could lead to further profit booking and a breakdown below 11,600 could extend selling pressure.
Experts suggest Nifty seems to be preparing itself for the next leg down.
“The risk-reward ratio continues to favour the bears to initiate a short position. On the downside, the Nifty is expected to target 11,615-11,590 in the next few sessions,” Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas told Moneycontrol.
“On the higher side, the breach of 12,041 on a closing basis shall act as a reversal for the bearish view,” he said.
On the options front, maximum Put OI is placed at 11,000 followed by 11,700 strikes while maximum Call OI is placed at 12,500 followed by 12,000 strikes. Option band signifies a trading range of 11,700-12,100 for the upcoming expiry on May 30, Thursday.
However, it may be difficult for the index to break above 12,000 in a hurry in the absence of any meaningful triggers. Investors should avoid forming any new or fresh long positions on the index.
“If the said index slips below 11,866 on May 29 then it can come under selling pressure on intraday basis with an initial target of 11,818. Besides, the current up move of last three sessions still looks like an upward corrective reaction to the big reversal candle witnessed from the highs of 12,041 registered on May 23,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“Hence, Nifty appears to be in the process of forming a short-term top around 12,000. For time being, traders are advised to avoid long positions in the index,” he said.
https://www.moneycontrol.com/news/b...mediate-top-avoid-long-positions-4034711.html
For investors, it is perfect time to accumulate quality stocks on the decline but for traders, the index is trading in so-called no trade zone.
Nifty witnessed selling pressure soon after it surpassed 12,000 and touched a fresh intraday record high of 12,041 last week on May 23. Since then, the momentum has fizzled out and the index has been flirting around 11,800-11,850.
On May 28, the index formed a ‘Hanging Man’ pattern that is a bearish reversal pattern. Formation of this pattern suggests that Nifty could have made an intermediate top around 12,000-12,041 and investors should avoid going long on the index, suggest experts.
For investors, it is perfect time to accumulate quality stocks on the decline but for traders, the index is trading in so-called no trade zone.
A break out above 12,041 would nullify the negative implication of Hanging Man formed on May 28 while a bearish candle on May 29 could lead to further profit booking and a breakdown below 11,600 could extend selling pressure.
Experts suggest Nifty seems to be preparing itself for the next leg down.
“The risk-reward ratio continues to favour the bears to initiate a short position. On the downside, the Nifty is expected to target 11,615-11,590 in the next few sessions,” Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas told Moneycontrol.
“On the higher side, the breach of 12,041 on a closing basis shall act as a reversal for the bearish view,” he said.
On the options front, maximum Put OI is placed at 11,000 followed by 11,700 strikes while maximum Call OI is placed at 12,500 followed by 12,000 strikes. Option band signifies a trading range of 11,700-12,100 for the upcoming expiry on May 30, Thursday.
However, it may be difficult for the index to break above 12,000 in a hurry in the absence of any meaningful triggers. Investors should avoid forming any new or fresh long positions on the index.
“If the said index slips below 11,866 on May 29 then it can come under selling pressure on intraday basis with an initial target of 11,818. Besides, the current up move of last three sessions still looks like an upward corrective reaction to the big reversal candle witnessed from the highs of 12,041 registered on May 23,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“Hence, Nifty appears to be in the process of forming a short-term top around 12,000. For time being, traders are advised to avoid long positions in the index,” he said.
https://www.moneycontrol.com/news/b...mediate-top-avoid-long-positions-4034711.html
