F&O Manual | Market rally slows down as Nifty faces resistance at 19,500

Analysts have noted that given the recent strong surge, indicators are entering an overbought territory, and prices are significantly deviating from the 5-day exponential moving average (EMA), indicating the possibility of occasional dips or sideways consolidation in the short term.

Shubham Raj

July 05, 2023 / 11:47 IST

Among individual stocks, long trades were seen in Motherson Sumi, RBL Bank and Colgate Palmolive.

Among individual stocks, long trades were seen in Samvardhana Motherson , RBL Bank and Colgate Palmolive.

After a six-day rally, the market seems to be losing its fizz as indices neared the key resistance levels, stoking caution ahead of the June quarter results. As of 11am, the Nifty traded down 10 points or 0.05 percent to 19,379.40. The Bank Nifty also fell 0.24 percent.

Analysts have noted that given the recent strong surge, indicators are entering an overbought territory, and prices are deviating significantly from the five-day exponential moving average (EMA), indicating the possibility of occasional dips or sideways consolidation in the short term.

Option data also shows consolidation around 19,400, while 19,500 remains a key resistance for the Nifty. On the monthly option chain, 19,700 has also seen an accumulation of calls as this will become a resistance if 19,500 is taken out.

Bars reflect change in OI during the day. Red bars show call option OI and green put option OI.

“It is advisable for traders to secure some profits and consider any dip as a buying opportunity. The support levels to watch are the bullish gap left on Monday around 19,200–19,250, followed by strong support at the psychological level of 19,000,” said Sameet Chavan, Head of Research for Technical and Derivatives at Angel One.