Mumbai: Will the benchmark nifty fall below the physiologically crucially crucial 7,200 level in the near’ term? that is what traders are asking after the index touched 7,177 intra-day On Wednesday before closing above the 7200-level. The consensus is that if the index falls below this level, it could decline by another 3-4% The silver lining is that the nifty is currently in the oversold zone, suggesting there is a possi bility of a rebound
“Nifty is currently at oversold zone and we expect strong support for the index round 7,200 levels,” said Dharmesh Shah, head of the technical at ICICI Securities.If global markets remain positive then there are chances that Nifty many climb back to 7,325 levels. However, if domestic markets continue to remain weak on disappointing corporate earning then the index may test 7,120 levels.In the dervatives segment, Nifty 7,200 put option has highest concentration of open interest or out standing position at 50.40 lakh shares. The has added Over 3 lakhs shares or 6% in open interest on Wednesday .This high level put buying at Nifty 7,200 strike also suggest that traders are not expecting markets to fall sharply below 7,200, said analysts.
Nifty, on January 20, dropped to 7,41, but found support and rallied back to 7,563 levels. US federal Reserve chairperson jennet yeller’s statement on semiannual monetary policy report to the house and senate special committee will be critical for the market.“if the nifty closes above 7,225 level this week, we could see index reversing the downtrend, and leading a pullback back towards 7,397.” Said pritesh Mehta, head of technical research picture at IIFL, “we will get a clear picture by the end of this week whether markets can sustain at current levels or shift downside.
