Weekly Nifty outlook by Choice Broking
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On August 2, Indian benchmark indices snapped a five-day winning streak and ended lower, with the Nifty falling below 24,750.
The market correction on Friday erased the week's gains, with both the BSE Sensex and NSE Nifty 50 indices ending the week lower. Nifty opened with a gap down and experienced weak price action throughout the day, closing down approximately 293 points. On the daily charts, Nifty closed below the levels of the last four trading sessions. There was a breakout failure as Nifty did not witness follow-through buying interest on the upside.
If the index manages to sustain above the 24,850 and 24,900 levels, it could rise further to 25,600 and 25,700 as per the range breakout. Conversely, if the price closes below the 24,600 level, it will likely correct further. On the downside, 24,400 and 24,000 act as crucial support levels.
The Relative Strength Index (RSI) is at 60, signaling a bearish reversal. Additionally, there is a bearish divergence in RSI. Analysis of Nifty put options reveals significant Open Interest (OI) at the 24,500 level, suggesting potential support there. On the call side, notable OI concentrations are observed at the 25,200 and 25,500 levels, approaching all-time highs.
Traders and investors are advised to look for buying opportunities during Nifty dips and to use appropriate stop-loss strategies below the identified support levels.
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