Tech View: Nifty charts hint at non-directional activity. What traders should do on Wednesday
Hinting that traders are buying at lower levels, the headline equity index on Tuesday formed a small bullish candle with a long lower shadow on the daily charts.
On the hourly timeframe, the momentum indicator RSI (14) was in a bullish crossover. Chart readers said the market is witnessing a non-directional activity, and perhaps traders are waiting for a breakout on either side.
Volume profile indicates Nifty may find support around the 18150-18200 zone, which was tested today. The highest OI was observed at 18500, followed by a 18600 strike price, while on the Put side, the highest OI was at an 18300 strike price.
What should traders do? Here’s what analysts said:
Rupak De, Senior Technical Analyst at
The short-term trend will likely remain bullish until the index sustains above 18350 on a closing basis. On the lower end, support is pegged at 18350/18150. Resistance on the higher end is seen at 18500–18700.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by
Nifty is expected to test the upper channel line near 18600. On the downside, 18200 will continue to pose crucial support.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
For bulls, 18450 would be the important breakout level to watch. And if the market manages to trade above the same, then we can expect a quick uptrend rally towards 18550-18600. On the flip side, trading below 18200 may increase further weakness up to 18100-18050.
Nagaraj Shetti, Technical Research Analyst, Securities
The negative chart pattern of lower tops and bottoms is intact, and the low of Tuesday at 18202 could be considered as a new lower bottom of the sequence. Hence, one may expect further upside in the short term towards the lower top formation. Immediate resistance is at 18450-18500 levels.
Ajit Mishra, VP – Technical Research,
Broking
Weak global cues have been weighing on sentiment. However, buying in select index majors is capping the damage so far. We feel the performance of the global markets will continue to dictate the trend in the absence of any major event. Meanwhile, traders should limit positions and prefer a hedged approach until we see some stability.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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