Tech View: Conviction missing from timid Nifty. What traders should do on Wednesday
Nifty ended flat on Monday, a small negative candle was formed on the daily chart with minor upper shadow. Technically, this market action indicates range-bound movement in the market at the highs.
This also signals lack of strength in the market to sustain the upside bounce, said Nagaraj Shetti of HDFC Securities.
On the derivatives front, the strikes of 19400 saw the addition of call open interest. Negative chart patterns like lower tops and bottoms continued as per daily chart and Nifty seems to be forming a smaller lower top as of now within a narrow range, analysts said.
What should traders do? Here’s what analysts said:
Rupak De, Senior Technical analyst at LKP Securities
A noticeable resistance was observed at the 21-day Exponential Moving Average (EMA) on the chart's upper spectrum.
The prevailing sentiment appears feeble, given that the index is positioned beneath the crucial moving average point. As things stand, the market continues to favor a strategy of selling into rallies, maintaining this stance as long as it remains below the 19500 mark.
Osho Krishan, Angel One
Technically, the movement for Nifty was restricted to 60 odd points, showcasing uncertainty among the counterparties.
The timidness certainly portrays a lack of conviction and awaits some triggers to emerge from the slumber phase. The chart structure remains unchanged as there are no significant alterations on the levels front.
As far as levels are concerned, 19300-19250 (50 DEMA) withhold the strong support zone. While 19480-19500 holds the sturdy resistance for the index in the comparable period.
Nagaraj Shetti, HDFC Securities
The repeated testing of immediate supports around 19300-19250 levels with lack of strength to sustain the highs could
