Tech View: Nifty forms Doji candle on daily charts. What traders should do on Wednesday

Headline equity index Nifty formed a Doji sort of candle on the daily charts as it gave the highest closing of the last 195 trading sessions. “Now, it has to hold above 18,088 zones for an up move towards 18,350 and 18,500 zones, whereas supports are placed at 18,088 and 18,000 zones,” said Chandan Taparia of Motilal Oswal Financial Services.

The index sustained above the hurdle of 18,096 levels on Tuesday, which is the previous top of the mid part of Sept 2022. Analysts said this is a positive indication, and one may expect further swing highs in Nifty.

Options data suggests a broader trading range between 17,600 to 18,600 zones while an immediate trading range in between 17,900 to 18,350 zones.
What should traders do? Here’s what analysts said:

Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The candle pattern of Tuesday indicates the formation of a high wave, and reflects volatility in the market at highs. Normally, such high wave formations at the highs/hurdles indicate caution for longs. But, still there is no confirmation of any reversal pattern unfolding at the highs. The next upside levels to be watched are around 18,500, and immediate support is placed at 18,080 levels.

Ajit Mishra, VP - Research, Religare Broking
Nifty reclaimed the 18,100+ zone almost after seven months, and it is likely to continue this tone; however, we can’t ignore the possibility of an intermediate pause or dip. Besides, the upcoming events viz the outcome of the US Fed meet and MPC’s special meet will keep the volatility high. Participants should maintain the “buy on dips” approach and stick with the sectors participating in the move.

Rupak De, Senior Technical Analyst at LKP Securities
On the daily chart, the index has moved above the previous swing high. The daily RSI is in a bullish crossover. The trend remains strong as long as it remains above 18,000. On the higher end, resistance is visible at 18,300.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
The area of 18,000-18,100 will now act as a support zone as per the principle of role reversal. Till the time, the Nifty stays above these levels, it can stretch to 18,300-18,400. On the flip side, if the index enters back into the sub-18,000 territory, then it will be a sign of exhaustion.

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