The lower tops and bottoms on the daily chart are intact and the present weakness could be in line with the new higher bottom formation of the pattern. The higher bottom reversal needs to be confirmed with an upside bounce from the lows. Immediate resistance is at 22400 levels and the next lower levels to be watched are around 22100-22000, Nagaraj Shetti of HDFC Securities said.
OI data showed that on the call side, the highest OI was observed at 22500 followed by 22600 strike prices while on the put side, the highest OI was at 22000 strike prices.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan
On the daily charts, we can observe that Nifty has broken down the Inside Bar pattern on the downside indicating range breakdown. We believe that Nifty is heading towards the lower end of the rising channel placed at 22150. The index has closed below the 20 (20444) and 40 (22311) day moving averages which is a sign of weakness. The daily momentum indicator has a negative crossover which is a sell signal. Thus, considering the above parameters we expect the Nifty to trade weak over the next few trading sessions.
Rupak De, Senior Technical Analyst, LKP Securities
Technically, the trend has weakened as the index fell below the 21EMA. A Head and Shoulders pattern is visible on the hourly chart, with the index currently sustaining below the neckline, indicating a bearish formation. Further selling pressure is anticipated, possibly extending towards 21980-22000 in the short term, as long as it remains below 22400.
Tejas Shah, Technical Research, JM Financial & BlinkX
The indicators are in the oversold zone on hourly charts and hence there is a strong possibility of recovery from the support levels in coming days. Supports for the Nifty are now seen at 22,200-250 and 22,000 levels. On the higher side, the immediate resistance zone for Nifty is at 22,500-600 levels and the next resistance is at 22,800 mark.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
