Technical View | Rangebound trade may sustain in Nifty with support at 19,550

The Nifty may remain rangebound with support at 19,550.

The trading range for the Nifty50 narrowed further on November 20, compared to the previous couple of sessions and closed moderately lower for yet another session. Hence, the ongoing rangebound trade is expected to continue in coming sessions too, with immediate support at the 19,600-19,500 area and the critical resistance at the 19,800-19,900 zone on the higher side, experts said.

The Nifty50 opened flat and remained volatile throughout the session with an intraday high of 19,756 and low of 19,670. The index settled at 19,694, down 38 points and formed a small bearish candlestick pattern with minor upper and lower shadows on the daily charts, indicating a rangebound session.

Hence, "the short-term trend of Nifty continues to be rangebound. There is a possibility of some more consolidation or minor weakness in the short term before showing upside bounce from the lows," Nagaraj Shetti, technical research analyst, HDFC Securities said, adding immediate support is placed around 19,600-19,550 levels.

He feels the recent swing high of 19,875 could be considered as a new higher top of the sequence. "Any dip from here is expected to be a higher bottom of the sequence."

On the options front, the maximum Call open interest was visible at 19,800 strike, followed by 19,900 strike, with meaningful Call writing at 19,800 strike, then 19,700 strike, while on the Put side, the maximum open interest was at 19,700 strike, followed by 19,000 strike & 19,600 strike, with writing at 19,600 strike, then 19,700 strike.

The above options data also indicated that 19,800-19,900 is expected to remain as a resistance area amid the current consolidation, with support at 19,600 levels.

Also read: Gainers and Losers: 10 stocks that moved the most on November 20

Bank Nifty

The Bank Nifty remained in the 100-150 points range and closed flat with a Doji kind of candlestick pattern formation on the daily charts, indicating indecisiveness among bulls and bears about future trend, especially after the recent correction. The index rose 1 point to close at 43,585.

"It is now approaching the crucial support zone of 43,400 – 43,300 where we can expect buying interest. The hourly momentum indicator has triggered a positive crossover which is a buy signal," Jatin Gedia, technical research analyst at Sharekhan by BNP Paribas said.

He expects the support to hold and the index to resume the upmove. On the upside, 44,000 – 44,100 shall act as an immediate hurdle from a short-term perspective, he said.

The volatility inched higher and climbed above 12.50 levels during the day, making the trend a bit favourable for bears. Fear index India VIX closed at 12.15 levels, up 2.7 percent over the previous session, in addition to the uptrend in the previous two sessions. It gained 9 percent in three sessions.