Tech View: Nifty finds support at 50-DEMA. What should traders do on Wednesday
pattern with a minor lower shadow on the daily chart and found support around the 50-day exponential moving average at 22,240 levels.
The lower tops and bottoms on the daily chart are intact and the present weakness could be in line with the new higher bottom formation of the pattern. The higher bottom reversal needs to be confirmed with an upside bounce from the lows. Immediate resistance is at 22400 levels and the next lower levels to be watched are around 22100-22000, Nagaraj Shetti of HDFC Securities said.
OI data showed that on the call side, the highest OI was observed at 22500 followed by 22600 strike prices while on the put side, the highest OI was at 22000 strike prices.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan
On the daily charts, we can observe that Nifty has broken down the Inside Bar pattern on the downside indicating range breakdown. We believe that Nifty is heading towards the lower end of the rising channel placed at 22150. The index has closed below the 20 (20444) and 40 (22311) day moving averages which is a sign of weakness. The daily momentum indicator has a negative crossover which is a sell signal. Thus, considering the above parameters we expect the Nifty to trade weak over the next few trading sessions.
Rupak De, Senior Technical Analyst, LKP Securities
Technically, the trend has weakened as the index fell below the 21EMA. A Head and Shoulders pattern is visible on the hourly chart, with the index currently sustaining below the neckline, indicating a
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