Technical Views: Nifty’s weakness to offer opportunities
Nifty is poised for short-term volatility and a corrective phase, with strong resistance at 25,100–25,350 and key support around 24,500. Stocks like Asian Paints, Bajaj Finance, Britannia, Gujarat Gas, HUL, Tata Technology, Natco Pharma, JSW Energy, JK Cement, and Deepak Nitrate have shown bullish trends on charts, according to technical analysts.
CHANDAN TAPARIA, ANALYST-DERIVATIVES, MOTILAL OSWAL FINANCIAL SERVICES
Where is Nifty headed?
<div data-placement=«Mid Article Thumbnails» data-target_type=«mix» data-mode=«thumbnails-mid» style=«min-height:400px; margin-bottom:12px;» class=«wdt-taboola» id=«taboola-mid-article-thumbnails-113177697»>Nifty negated the formation of higher highs and formed a bearish engulfing pattern on weekly scale which indicate some profit booking at higher zones. It started to form lower top lower-bottom with negative divergence on the relative strength index which indicates strength is missing. Now Nifty has major support at 24,600-24,650 zones which is 157 gann square and a 50% retracement of the recent move from 23,893 to 25,333 zones. Overall, on an immediate basis, Nifty needs to hold 24,600-24,650 zone to absorb the recent supply and witness a recovery towards 25,150 and 25,333 zones. On the downside, the next key support exists at 24,444.
What should investors do?
Traders are advised to play the capped upside stance by looking at the short-term price structure while investors can use the recent dip or corrective move to add stocks to portfolio. Most of the sectorial indices witnessed profit booking with the formation of the bearish candle, but technology, FMCG and pharma could provide some defence while weakness could be seen in banking, metal, realty, capital goods, and PSU
