Tech View: Nifty charts hint at selling pressure on every uptick. What traders should do on Wednesday

Nifty formed a small-bodied bearish candle with a longer lower shadow on the daily scale, which indicates buying interest on declines but the absence of follow-up activities at higher zones. Now, it needs to cross and hold above 17777 zones, for an up move towards 17950 and 18081 zones, whereas supports are placed at 17650 and 17500 zones, said Chandan Taparia of Motilal Oswal.

As Nifty formed a lower top for the second consecutive day, chart readers said 17,870 – 17,854 could be the trading range for the Nifty in the near term.Options data suggests a broader trading range between 17400-18200 zones, while an immediate trading range between 17600-17900 zones.

India VIX moved down by 3.85% from 14.68 to 14.12 levels. Volatility has overall fallen in the last six sessions and now needs to hold below 14 zones for market stability.
What should traders do? Here’s what analysts said:

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
Structurally, the consolidation can continue in the tight range of 17650-17800 before the index extends towards 18000 on the upside. The hourly chart also shows that the Nifty is trading just below a falling trendline and once the index crosses the level of 17800 on the higher side, it will be considered a trendline breakout.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
On intraday charts, Nifty has consistently found resistance near the 17800 mark, and has also formed a lower top formation, indicating temporary weakness. As long as the index trades below 17800, the selling pressure is likely to continue. Below which, the Nifty could slip till 17600-17550. On the flip side, a fresh uptrend is possible only after the dismissal of 17800, above which the index could move up to 17850-17900.

Ajit Mishra, VP - Technical Research, Religare Broking
Markets have been facing pressure with every uptick. However, buying in select index majors is capping the damage so far. Participants are closely eyeing the outcome of the RBI meeting for cues. However, indications are pointing toward prevailing choppiness to continue until the Nifty decisively breaks the range of 17,550-17,900 levels. We thus recommend restricting trades and maintaining positions on both sides.

Rupak De, Senior Technical Analyst at LKP Securities
Nifty faces stiff resistance around the 17,800-17,850 zone where aggressive call writing is visible. The index needs to surpass this level on a closing basis to witness a short covering move toward the 18,200 level. The support on the lower end is at the 17,600 level and if breached, will lead to a further correction towards 17,450-17,400 levels.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of The Economic Times)