Technically, the index closed below the level of 22,500, which has been acting as a minor support for the last couple of days. While this is a negative development, it’s not something that opens a big downside, Tejas Shah of JM Financial & BlinkX said.
Nifty is likely to remain volatile within 22,200–22,800 range in the near term.
What should traders do? Here’s what analysts said:
Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities
Nifty is showing signs of near-term bearishness as it forms a double-top pattern on the daily chart, coupled with a bearish engulfing candle. This suggests a sell-on-rise approach in the market. Confirmation of the double-top pattern would require follow-up selling in the upcoming week. Immediate resistance is noted at the 22,600-22,700 zone, where aggressive call writing has been observed in the options market. On the downside, the index has immediate support at 22,300, and a breach below this level could accelerate the downside momentum.
Jatin Gedia, Sharekhan
On the daily chart, Nifty has formed an engulfing bear candlestick pattern, which has bearish implications. On the downside, Nifty has managed to hold on to the 20-day moving average, which once breached on the downside and can lead to a further decline. Key support levels are placed at 22,405 – 22,285. On the upside immediate hurdle is placed at 22,650.
Osho Krishan, Angel One
From a technical standpoint, the index has certainly managed to hold the higher ground, but with the developments in the last session, it would be crucial to watch for the pivotal support zones for the upcoming trading week. For now, the immediate swing low of the 22,350-22,300 subzone is likely to provide a firm cushion for any intra-week blip, followed by the 50 DEMA of 22230 and the bullish gap around the 22,200 zone.On the higher end, the record-high zone of 22,750-22,800 seems daunting for the bulls and until we witness a decisive breakthrough, the next leg of rally toward the 23000 mark seems demanding.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)