Technical analysts say this pattern signals broader range-bound action in the market with weak bias. “This pattern also indicates a lack of strength in the intraday upside bounce. This is not a good sign and one may expect further weakness in the short term,” Nagaraj Shetti of
Securities said.
“Nifty formed a Bearish candle on the daily scale and has been making lower highs – lower lows from the last five trading sessions. Now, till it remains below 17,166 zones, weakness may be seen towards 16,800 and 16,666 zones whereas hurdles are placed at 17,166 and 17,250 zones,” said Chandan
of .
Analysts said the texture of the market continues to be sell-on-rise.
What should traders do? Here’s what analysts said:
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Lower top formation on the intraday charts and bearish candle on daily chart indicates continuation of weakness in the near term. However, momentum indicators suggest a strong possibility of a pullback rally from the current levels. We are of the view that the bearish sentiment in the market is still intact and a fresh pullback rally is possible if the index succeeds to trade above 200 day SMA (Simple Moving average) or 16,940/56,950. Above this, the index could retest the level of 17,150-17,200/57,500-57,700.
On the flip side, below 16,940/56,950, it could slip till 17,850-17,800/56,600-56,500. The intraday texture of the market is non directional, hence level based trading would be the ideal strategy for the day traders.
Rupak De, Senior Technical Analyst at
The momentum indicator is in a bearish crossover. The trend remains weak. However, the proximity to the crucial support may induce a pullback in the market. On the higher end, resistance is visible at 17,150-17,200. Above 17,200, the Nifty50 may move towards 17,500. On the other hand, a decisive fall below 16,950 may trigger panic in the market.
Prashanth Tapse, Senior VP (Research), Mehta Equities
Technically, the biggest support to watch on Nifty50 will be at 16,907. As long as 16,907 support is held, there is a bright chance that the index could bounce to 17,347 and then at the 17,727 mark.
Chandan Taparia, Motilal Oswal Financial Services
On the Options front, Maximum Call OI was at 18,000-17,500 strike, while Maximum Put OI was at 16,000-17,000 strike. Call writing was seen at 17,100-17,200 strikes while minor Put writing was seen at 16,900-16,600 strikes. Options data suggests a broader trading range in between 16,600 to 17,500 zones due to higher volatility while an immediate range in between 16,800 to 17,300 zones.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
