Tech View: Nifty support shifts to Budget day low. What should traders do on Thursday expiry

Headline index Nifty today formed a long bearish candle on the daily chart and a lower top on the intraday chart, indicating further weakness from the current levels. Now till it holds below 17,777, weakness could be seen towards 17,442 and 17,350 zones whereas hurdles are placed at 17,777 and 17,850 zones, said Chandan Taparia of Motilal Oswal.

Option data suggests a broader trading range between 17,350 and 17,750 zones due to a spike in the volatility Index.

Chart readers have observed the formation of overlapping candles during the ongoing weakness and the absence of a sharp decline from the swing highs of February 16, indicating possibility of an upside bounce to emerge from the lows.

Support for the Nifty is seen at 17,353, which happens to be Budget day low. Tomorrow is the expiry of both weekly and monthly derivatives.

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

Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The positive chart pattern like higher tops and bottoms is intact and present weakness could be in line with the formation of new higher bottoms of the sequence. But, still there is no confirmation of any higher bottom reversal at the lows. There is a possibility of an upside bounce in the market from near the support of 17,700-17,750 levels. Immediate resistance is placed at 17,950-18,000 levels.

Rupak De, Senior Technical Analyst at LKP Securities
Nifty50 is trading in a downtrend with lower-high and lower-low formation intact on the daily and weekly charts. Momentum indicator RSI is on the verge of a breakdown and is likely to enter the weak zone. The view remains bearish as long as the index stays below the 18,000 mark and can slide towards 17,400/17,200 levels.

Rahul Ghose, Founder & CEO – Hedged
As the level of 17,710 has been taken out, the near-term trend has now become sideways to bearish pending the take out of the 200-day EMA and SMA. Once this also gets taken out, the trend will get confirmed to bearish.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Since the market is in an oversold zone, we could see a sharp pullback rally, if the index trades above 17,600. For traders now, 17,600 would be the key level to watch out for and above the same the pullback move will continue till 17,700-17,750. On the flip side, below 17,600 the index could slip till 17,500-17,475. Contra traders can take a long bet near 17,475 with a strict support loss at 17,440.

Ajit Mishra, VP - Technical Research, Religare Broking
The pace of decline was gradual till Tuesday but a sharp cut in the US markets has completely changed the tone. Indications are pointing towards the same tone to continue, with the next major support around the 17,250-17,400 zone. In case of any rebound, the 17,700-17,900 zone would act as a strong hurdle. Traders should continue with a “sell on rise” approach and limit positions

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