Tech View: Nifty forms Inside Bar Candle, can correct below 23,600. How to trade on Wednesday
Nifty formed an Inside Bar candle on the daily chart on Tuesday, closing near the 23,700 mark. However, market sentiment remains cautious. A breach below the 23,600 level could lead to further corrections towards 23,400 and 23,000, identified as immediate support levels. On the upside, resistance is pegged at 23,800 and 24,000.
Technical indicators presented mixed signals. The RSI at 43 suggested bearish momentum, while the Stochastic RSI showed a bullish crossover, hinting at a possible short-term recovery. This divergence underlines the importance of vigilance, as the market lacks a definitive directional bias, said Mandar Bhojane of Choice Broking.
According to the open interest (OI) data, the highest OI on the call side was observed at 24,000 and 23,800 strike prices, while on the put side, the highest OI was at 23,500 strike price followed by 23,700.
What should traders do? Here’s what analysts said:
Jatin Gedia, Mirae Asset Sharekhan
On the daily charts, we can observe that the Nifty consolidated within the range of the previous trading session, thus making the extremes of the penultimate candle crucial levels to watch out for in the short term i,e 24,100 – 23,550. We expect the Nifty to consolidate between these extremes for the next few trading sessions. Sector rotation and stock-specific action are likely during this phase. Daily and hourly momentum indicators suggest a pullback as they have a positive crossover. The immediate hurdle on the upside is 23,950 – 24,000 while support is placed at 23,550 –
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