Tech View: Nifty forms bullish candle. What traders should do on Wednesday

Indicating support based buying, headline equity index Nifty formed an Inside Bar and a Bullish candle on daily frame with long lower shadow. Now, it has to hold above 18200 zones for an up move towards 18350, then 18442 zones, whereas supports are placed at 18088 and 17950 zones, said Chandan Taparia of Motilal Oswal.

India VIX was down by 6.47% from 14.79 to 13.84 levels. Volatility has been cooling off for the last eight weeks and gave its lowest closing of the last 294 sessions.

Options data suggests a broader trading range between 18000-18600 zones, while an immediate trading range between 18100 to 18400 zones.

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

Manish Shah, Trader and Coach
Nifty is in an uptrend, and the decline seen in the last couple of days is a corrective decline within an ongoing trend. We are likely to see Nifty move higher to 18,410-18,450 if Nifty manages to move above 18310 towards the end of November expiry.

Nifty seems to be completing its corrective decline, and it is getting ready for a move up to 18410-18450 before end of November expiry.

Ajit Mishra, VP - Research, Religare Broking
In the absence of any major event, the performance of the global indices, especially the US markets, will dictate the market trend. Besides, the upcoming expiry of November month derivatives contracts would keep the participants busy. Meanwhile, we suggest continuing with a stock-specific trading approach and focusing on sectors that are showing resilience in the recent dip.

Rupak De, Senior Technical Analyst at LKP Securities
Nifty started flat, following global peers and moved up higher by the end of the session. On the higher end, it moved back above 18200. A bullish harami pattern on the daily chart suggests a recovery in the term.

The trend looks sideways to positive. Going forward, 18200 may provide immediate support, below which the index may drift down towards 18100. On the higher end, resistance is visible at 18300/18450.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
The Nifty has stepped into a short-term consolidation & the overall structure shows that the consolidation is here to stay for the next 1-2 weeks. Within this consolidation, the Nifty is expected to witness swings in both directions. In the last couple of sessions, it had formed the first leg on the downside and had reached near the 20 DMA.

Consequently, the Nifty went for a bounce back today, which can take the Nifty to the hourly upper Bollinger Band, which is near 18300. Over there, the index is likely to attract selling pressure again. Overall, short-term consolidation is expected in the range of 18,000-18,450.

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