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The headline index, Nifty, has formed a long bearish candlestick on the daily chart and has broken below its highs on the intraday chart today, suggesting further weakness from current levels. According to Motilal Oswal’s Chandan Taparia, we could see weakness towards the 17,442 and 17,350 zones unless he falls below 17,777, with the hurdles set for him at 17,777 and him at 17,850 zones.
Options data show a wider trading range between the 17,350 zone and he 17,750 zone due to the rising volatility index.
Chart readers point to overlapping candles forming during continued weakness and lack of sharp pullback from swing highs on Feb 16, suggesting a possible rally from lows doing.
Nifty’s support is seen at 17,353, which happens to be the budget’s daily low. Tomorrow is the maturity date for weekly and monthly derivatives.
What Should Traders Do? An analyst said:
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
Positive chart patterns such as higher highs and higher lows are intact, and the current weakness may coincide with the formation of a series of new higher lows. Not yet. The market could become bullish around the 17700-17750 support. Immediate resistance is placed at the 17,950-18,000 level.
Rupak De, Senior Technical Analyst, LKP Securities
The Nifty50 is trading in a downtrend, with sub-high and sub-low formations still intact on the daily and weekly charts. The momentum indicator RSI is about to break and is likely to enter its weak zone. As long as the index stays below his 18,000 level, the view remains bearish and may slide towards 17,400/17,200.
Rahul Ghose, Founder and CEO – Safety
With the 17,710 level removed, the short-term trend turned sideways bearish until his 200-day EMA and SMA were removed. If that too is removed, the trend is confirmed as bearish. Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
As the market is in the oversold zone, we could see a strong rally if the index trades above 17,600. For current traders, 17,600 is a key level to watch and above it will continue to pull back from 17,700 to 17,750. If it rises, the index will fall below 17,600 and possibly between 17,500 and 17,475. Contra traders can make a long bet around 17,475 and set a tight support drop at 17,440.
Ajit Mishra, Vice President – Technology Research, Religious Mediation
The pace of the decline was moderate until Tuesday, but a sharp drop in the US market completely changed the tone. The indications show a continuation of the same tone with the next major support around the 17,250-17,400 zone. For recovery, the 17,700-17,900 zone acts as a strong hurdle. Traders should proceed with the sell-on-rise approach and limit their positions.
(Disclaimer: Expert recommendations, suggestions, views and opinions are those of the experts themselves and do not represent the views of The Economic Times)
