Tech View: Nifty charts showing signs of upside breakout. What should traders do on Wednesday

The lower bottom reversal seems to have confirmed at Monday’s low of 16,828 levels, and one may expect further upside in the short term towards the lower top formation. A decisive move above the hurdle of 17,200 levels is likely to bring sharp upside momentum for the Nifty in the near term. Immediate support is at 16,950 levels, said Nagaraj Shetti of HDFC Securities.

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

Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
On the hourly charts, we can observe positive divergence along with a positive crossover on the momentum indicator, which indicates a loss of momentum on the downside and shall provide speed to the current pullback. On the upside, we expect Nifty to target the zone of 17150 -17200, which coincides with the previous swing high and the 38.2% Fibonacci retracement level of the fall from 17800 – 16828. The immediate support stands at the lower end of the downward-sloping channel 16800 – 16850.

Rupak De, Senior Technical Analyst at LKP Securities
Nifty has been consolidating for the past few days, indicating indecisiveness. The trend remained negative for the short term as the index has been sustaining below the critical moving average on the daily chart. The RSI on the daily chart narrowed down its bearish crossover. The trend is likely to remain sideways as long as it remains within the bands of 16950-17200. A decisive move above 17,200 may induce a rally towards 17,450-17,500, while a decisive fall below 16,950 may trigger a steeper correction in the market.

Ajit Mishra, VP – Technical Research, Religare Broking
We expect the recovery to strengthen further. However, the upside still seems capped, citing multiple hurdles till 17,400 levels in Nifty. Besides, caution ahead of the outcome of the US Fed meeting would keep the volatility higher. Participants should align their positions accordingly while keeping a check on leveraged trades.

Rahul Ghose, Founder & CEO – Hedged
Nifty has a congestion zone between 17,350 and 17,550, so only above this level can one look to take bullish positions on the index. The highest open interest continues to remain at the 17,000 level on the put side both for the weekly and monthly expiries. The sell-on-rally texture of the market will not be negated till a bullish close happens above the 17,550 mark. Another point to keep in mind is that any aggressive shorts are to be initiated only below the 16,720 level on the Index.

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