We are unlikely to see any major downward correction from the hurdle of 11,350 in the short term. The short-term uptrend remains intact, say experts.
The bulls failed to keep the momentum going on D-Street as the Nifty50 closed below 11,300 on August 10. A tug of war between the bulls and the bears continued, which suggests that strong resistance is placed at 11,300-11,350.
The Nifty50 ended at 11,270, gaining 56 points, while the S&P BSE Sensex rose 141 points to 38,182.
Sectorally, action was seen in healthcare, capital goods, realty, industrials, and utilities, while profit-taking was visible in energy, and oil & gas stocks.
The good part is that the Nifty50 closed above 11,250 levels but traders should remain cautious at higher levels near 11,300-11,350, say experts. On the other hand, if the index closes below 11,250-11,200 levels, further selling pressure could be seen, Sameet Chavan, Chief Analyst-Technical and Derivatives, Angel Broking, told Moneycontrol.
“Since the last couple of days, we have been advocating some caution because the Nifty has approached a strong resistance zone of 11,300-11,350 and although there is no sign of weakness yet, it will not be easy for the index to overcome this sturdy wall,” Chavan said.
A major global or domestic trigger is required to unfold the next leg of the rally, he said. Till then, better to take some money off the table and wait for further development.
We have collated views of experts on what investors should do on August 11 when the market resumes trading:
Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities
The Nifty opened higher on August 10 following positive global indicators but failed to move to 11,340, which is the closest to the highest level, mainly due to weakness in energy, telecom, and auto stocks.
We should keep an eye on the dollar index as it is rising from a low and is at 93.58. The index may increase further. Monday’s lowest level will be a big support for the market and crossing 11,350 will push it towards 11,500 levels. Below 11,200, the Nifty can slip to 11,100 levels.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The Nifty is placed at the crucial resistance of previous swing high of 11,341 (July 29) and there is a possibility of more consolidation or range movement in the next session.
Rohit Singre, Senior Technical Analyst at LKP Securities
The Nifty closed the day at 11,270 with gains of half a percent and formed a Doji pattern on the daily chart that shows indecision in the market.
The index has shown profit-booking from the previous swing high. If the index continues to trade below 11,350, we will see some more profit-booking in the coming session. Immediate support is coming near the 11,200-11,100 zone and resistance near the 11,350 zone.The Nifty Bank closed the day at 21,900, with gains of nearly 0.70 percent. Support for the Nifty Bank is near the 21,700-21,500 zone and resistance 22,100-22,300 zone.
Gaurav Ratnaparkhi, Senior Technical Analyst, Sharekhan by BNP Paribas
The index moved higher to test the recent high of 11,341. The bears, however, rushed in to push the index down. Though the Nifty posted a positive daily close, it formed a Doji pattern on the daily chart.
This shows a loss of momentum on the way up. The same is evident from the hourly momentum indicator, as it is showing negative divergence, which is a bearish sign. On the downside, 11230-11200 is the immediate support zone, below which a fresh move down can be expected.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.