Tech View: Nifty forms bearish candle. What should traders do on Tuesday

Headline index Nifty on Monday formed a bearish candle on the daily scale with a longer lower shadow indicating buying at declines, but a follow-up was missing at higher zones. Now, it needs to hold above 17,777 zones for an up move towards 17888, then 17950 zones, whereas supports are at 17650 and 17500 zones, said Chandan Taparia of Motilal Oswal.

Fear gauge index India VIX moved up by 7.38% from 12.75 to 13.68 levels. Volatility negated its lower highs formation of the last seven trading sessions and now needs to cool down for market stability to resume.

Options data suggests a broader trading range between 17400 to 18200 zones, while an immediate trading range between 17650-17950 zones.

What should traders do? Here’s what analysts said:

Shirkant Chouhan, Head of Equity Research (Retail), Kotak Securities
For traders now, 17,850 would act as a key resistance zone. Below the same, Nifty could slip till 17650-17600. On the flip side, a fresh uptrend rally is possible only after the dismissal of 17850, above which the market could move up to 17925-17950.

Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
Since last week, Nifty has been range-bound, and until we get a decisive move above the zone of 17850 – 17900, the range-bound action is likely to continue. The daily momentum indicator has a positive crossover which is a buy signal and also suggests that this dip should be bought into. Overall, we expect the Nifty to test the upper end (18100) of the downward-sloping channel from a short-term perspective.

Ajit Mishra, VP - Technical Research, Religare Broking
The dip in the index has pushed the bulls slightly on the back foot, but they are not out of the game yet. A decisive close below 17650 in Nifty could turn the bias in favour of further fall else the range-bound move would continue. Meanwhile, we reiterate our view to focus on stock-specific opportunities and maintaining positions on both sides.

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