The positive chart pattern like higher tops and bottoms is intact on the daily chart and the present weakness could be in line with the formation of new higher bottoms of the sequence. A decisive move below 21,500 levels could open the next downside of 21,255 (20-day EMA) and the next 20,980 levels in the near term. Immediate resistance is placed at 21,670, Nagaraj Shetti of HDFC Securities said.
What should traders do? Here’s what analysts said:
Rupak De, Senior Technical Analyst at LKP Securities
Nifty dipped below the support level of 21,650, resulting in a decline towards 21,500. The prevailing sentiment appears weak, highlighted by the index closing below the crucial support at 21,650. If it continues to drop below 21,500 in the upcoming days, it could potentially exacerbate the negative sentiment, especially with expectations of substantial unwinding by put writers below 21,500. The broader market outlook suggests a sell-on-rise strategy as long as it stays below 21,650.
Jatin Gedia, Technical Research Analyst at Sharekhan
On the daily charts, we can observe that Nifty closed in the red for the second consecutive day. Intraday pullbacks are being sold into and the 20-hour moving average (21,642) is acting as a stiff resistance. On the way down the Nifty has now reached the 38.2% Fibonacci retracement level (21507) which is likely to act as a make-or-break level for the Nifty. We expect Nifty to hold on to this support and prepare a base for the next leg of upthe move. Overall, we believe that the fall is a retracement of the previous rise from 20976 – 21834 and not a trend reversal, and thus this dip should be used as a buying opportunity.
Osho Krishan, Sr. Analyst – Technical & Derivative Research, AngelOne
On the technical front, our markets are gradually losing their sheen as it forms lower highs – lower lows on the hourly time frame. The bullish gap around 21,500-21,475 withholds the last ray of hope for bulls, as any breach below could derive a further round of profit-booking in the market and it may plunge lower to 21,200 (21 DEMA) in the coming period. On the flip side, a decisive surge above 21600-21650 could only restrengthen the primary momentum. For now, it is important to maintain caution as we stand on a crucial make-or-break zone and could attract traction on either side in the comparable period.(You can now subscribe to our ETMarkets WhatsApp channel)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
