Commenting on the Technical outlook of Nifty Kunal Kamble, Sr. Technical Research Analyst at Bonanza, said that Nifty managed to trade above the 26,200 level on an intraday basis but closed below it, forming a negative candle. This suggests that until the market trades above the intraday high of 26,278, a pause in the upward movement may be witnessed. The RSI, currently above 70, indicates that the index is in overbought territory, and a trend pause can be expected in the coming days. On the derivatives front, the highest open interest (OI) is observed at the 26,500 call options, where a short buildup (SB) has formed.
Kamble also added that Conversely, the 26,200 put options hold the highest OI, with fresh short buildup also noted. The monthly put-call ratio (PCR) stands at 1.14, indicating a tug of war between option participant. Considering both the technical and derivatives outlook, a “buy on dip” strategy could be effectively employed for the Nifty Index.
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