Tech View: Nifty forms small positive candle. What traders should do on Tuesday
The short-term trend of Nifty remains positive with range-bound action. A decisive break below the support of 21,900-21,850 is likely to drag the index down to 21,500 levels in a quick period.
on Monday ended 32 points higher to form a small positive candle on the daily chart with minor upper and lower shadow. During the day, the index managed to hold on to the support zone of 21,900 – 21,850 where support parameters in the form of the 40-day average and the previous swing low were placed.The short-term trend of Nifty remains positive with range-bound action. A decisive break below the support of 21,900-21,850 is likely to drag the index down to 21,500 levels in a quick period. Any upside bounce from here could encounter strong hurdles around 22,200 levels, said Nagaraj Shetti of HDFC Securities.
Open Interest (OI) data showed the call side had the highest OI at 22,200 strike price, followed by 22,500 strike price. On the put side, the highest OI was observed at the 21,800 strike price.
What should traders do? Here’s what analysts said:
Rupak De, LKP Securities
Nifty remained volatile throughout the day, oscillating between 21,900 and 22,100. Bulls have thus far managed to defend the 21,900 level successfully. However, a dip below 21,900 could strengthen the bears' position, although for now, any downturn is being met with buying activity. On the upside, a sustained upward movement beyond 22,100 may propel the index towards 22,250 and beyond. Support is established at 21,900, below which the index might decline towards 21,700.Ajit Mishra, Religare Broking
The recent price action in Nifty shows indecisiveness among the participants and frequent breakout failures on the stock-specific front further adding to their worries. We thus feel it is prudent to limit positions in the current scenario and wait for clarity over the next directional move. Jatin Gedia, Sharekhan
Nifty is still trading in the range 21,900 – 22,200 since the last three trading sessions and a decisive breach shall lead to trending moves in that direction. So, until the support zone is held, we can expect the positive momentum to resume. In terms of levels, 22,215 – 22,250 is the immediate hurdle zone while 21,900 – 21,860 is the crucial support.Tejas Shah, Technical Research, JM Financial & BlinkX
Nifty is trading around a make-or-break support zone of 21,850 to 22,000 levels and any decisive close below the same can trigger 1% to 2% fall in Nifty on an immediate basis or else chances of a bounce back from this support zone is very high.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
Source: Stocks-Markets-Economic Times
