After the Bell: Bulls fail to hold on to 10,800 levels, what should investors do on Thursday?

Bulls failed to hold on to 10,800 levels yet again on July 15. The Nifty has now witnessed selling pressure above 10,800 in the last five out of six sessions, which suggests that it will not be easy for the bulls to surpass 10,900 in one go.

The Nifty rose to 10,830 in the first half of the trading session, led by Reliance Industries and technology companies. However, the market fell sharply in the second half on the back of profit-taking seen in RIL post its 43rd annual general meeting (AGM) and liquidation in financials

One thing is certain that the momentum seems to be fading. Bulls are not able to gather momentum above 10,800 levels or close above its 200-day moving average (DMA) placed at 10,876 levels.

As the upside from current levels looks limited in the absence of fresh triggers, analysts advise investors to remain cautious and avoid leverage bets to avoid getting caught on the wrong side.

If the index slips below 10,550-10,530, it will be an ideal level to initiate short positions, experts told Moneycontrol.

Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities, said traders should either sell Nifty at its resistance of 10,700 or if it is trading below its support level of 10,550. “Below 10530 levels, the Nifty could fall to 10,200 or 10,000 levels. On the higher side, 10,700 and 10,750 will be the major obstacles."

We spoke to various experts and here’s what they recommend for trade on July 16:

Nifty formed a bearish candle on a daily scale as sustained supply pressure is visible at higher levels. It has also given a consolidation break down by holding below its previous weekly support of 10,650 zones.

Mechanical indicator RSI has given a negative crossover and showing a sign of profit booking decline. Now, till it holds below 10,700 zones, weakness could be seen towards 10,500-10,450 zones while immediate hurdle exists at 10,750 then 10,850 zones.

On option front, maximum put OI is at 10,000 followed by 9,000 strikes, while maximum call OI is at 11,000 followed by 11,500 strikes.

Bank Nifty opened positive and gradually extend its move towards the 21,935 mark in the first half of the session. However, it wiped out entire intraday gains of 500 points and closed below 21,500 levels.

As long as it holds below 22,000 zones, profit booking decline could be seen towards 21,000-20,800 zones.

After showing sharp weakness on July 14, Nifty witnessed high volatility today and closed the day on nominal gains of 10 points. A small negative candle was formed on July 15 with a long upper shadow. This pattern signals the instability of bulls to sustain the higher levels.

The short term trend of Nifty is weak. Wednesday's (July 15) higher levels of weakness could signal the possibility of more declines in the short term. Any intraday up moves could run into resistance.

The selling momentum is expected to be picked up on a slide below 10,550. The downside targets for Nifty to be watched around 10,350-10,300 for the next one week. Immediate resistance is placed around 10,750-10,800 for the next few sessions.