After making lower lows for the last six trading days, the headline equity index Nifty today formed a long negative candle on the daily chart and indicated that the downward trend might continue amid capped movement.
Chart readers observed overlapping candles over the last few sessions which reflects the market’s inability to sustain the gains.
Till the index holds below 18250 zones, weakness may be seen towards 18000 and 17950 zones, whereas hurdles are placed at 18250 and 18350 zones, said Chandan Taparia of Motilal Oswal.
Fear gauge index India VIX was up by 2.39% from 15.56 to 15.18 levels amid the weekly F&O expiry. Volatility spiked to 16.30 zones during the day, and a jump from the last two sessions reflects weaker sentiments creeping in amid rising Covid cases in China.
Options data suggests a shift in a wider trading range between 17800 to 18500 zones and an immediate range between 18000 to 18350 zones.
What should traders do? Here’s what analysts said:
Rupak De, Senior Technical Analyst at LKP Securities
Indian equities have continued to remain weak as Nifty slipped below the 50-EMA on the daily timeframe. On the lower end, the index found support around 18070 before closing a bit higher. On the higher end, 18350 may act as critical support, and the market may remain sell-on-rise till the Nifty remains below 18350–18500. On the lower end, a decisive fall below 18070 may trigger selling pressure in the market.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The short-term trend of the Nifty remains weak. Any slowdown in the downside momentum around the support of 18100-18000 levels in the next 1-2 sessions could result in a sharp upside bounce from the lows. There is no sign of any bottom reversal forming around the supports so far. Immediate resistance is placed at 18240 levels.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
The index is trading near a very crucial support of 18000. Till that level holds on a closing basis, there is scope for some recovery. However, a breach of 18000 on a closing basis will intensify the selling pressure and shift the near-term resistance zone lower to 18200-18300.
Ajit Mishra, VP – Technical Research, Religare Broking
Mixed global cues combined with caution on the domestic front are causing erratic swings amid the prevailing corrective trend. And we expect the choppiness to continue, citing the excessive news flow. Besides, we have diverging signals from key indices as the Nifty has reached the crucial support zone i.e. 18,000-18,100, but the banking index has further room for decline. Amid all this, traders should focus more on overnight risk management and limit positions.
(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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