Tech View: Nifty forms long red candle on daily chart. What traders should do on Friday

Nifty on Thursday fell over 200 points to form a strong bearish candle on the daily chart, which might negate the intermediate bullish undertone.

The short-term trend of Nifty seems to have turned down and one may expect some more weakness in the short term. The near-term uptrend of the market remains intact and further weakness down to the immediate support of 21,550-21,500 levels could be a buying opportunity, said Nagaraj Shetti of HDFC Securities.

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

Rupak De, LKP Securities

Nifty experienced a sharp decline as follow-up selling emerged following profit-booking in the previous trading session. However, on the lower end, it found initial support at the 20-DMA. The trend could weaken if it drops below 21,690, at which point the index may decline towards 21,500. On the contrary, if it remains above 21,700, we might observe a recovery in the near term.

Osho Krishan, Angel One

The 20-DEMA is very much in the vicinity and a breach below could further disrupt the chart structure, and we might witness 21,500 in the comparable period. The broader structure remains sideways, with Nifty hovering within a broad range of 500-600 odd points. On a level-specific front, 21,500 should be acting as a strong support zone, and till the market sustains above the same, we might witness some buying traction. On the higher end, 21,800-21,900 is likely to act as an intermediate resistance zone, with a sturdy hurdle placed at the 22,000 mark.

Ashwin Ramani, derivatives analyst, SAMCO Securities

The long-short ratio fell sharply to 34.36% on 7th February from 37.31% on 6th February as foreign portfolio investors (FPIs) built significant short positions in index futures for the first time since the start of the February series.

Strong-call writing (bears entry) along with put writers exiting (bulls exit) was observed at the 21,800 & 21,900 Strike in Nifty, leading to a sharp intraday fall. The call writers built significant positions at the 21,700 Strike in the index. The put writers (bulls) have sizeable positions at the 21,500 Strike in Nifty & the Option activity at this Strike will provide cues about Nifty’s future direction.

Jatin Gedia – Technical Research Analyst at Sharekhan

Despite multiple attempts, the Nifty has been unable to surpass the resistance zone. On the downside, the 20-day moving average (21,694) has been providing support. The hourly momentum indicator has triggered a negative crossover, while the daily is still in buy mode, and thus providing divergent signals. This could lead to consolidation from a short-term perspective. Overall, we expect the consolidation to continue with negative bias. On the downside, the Nifty can drift towards the 21,500 – 21,435 zone where support parameters in the form of a 40-day average are placed.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

(You can now subscribe to our ETMarkets WhatsApp channel)

(What’s moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

Download The Economic Times News App to get Daily Market Updates & Live Business News.

Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

Source link

Denial of responsibility! NewsConcerns is an automatic aggregator of the all world’s media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials, please contact us by email – [email protected]. The content will be deleted within 24 hours.

Leave a Comment