Tech View: Nifty consolidating near 50-DMA. What traders should do on Wednesday

While consolidating near the 50-DMA, Nifty on Tuesday ended 37 points higher and formed a small negative candle on the daily chart with a minor lower shadow. Technically, this pattern indicates a minor upside bounce in the market with rangebound action, analysts said.

The lower tops and bottoms continued on the daily chart and the present up move of the last two sessions is expected to form a new lower top of the sequence, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

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

Rupak De, Senior Technical analyst at LKP Securities
The support at the lower end remains solid at 19,245, serving as a barrier to prevent further declines. On the upper end, resistance is placed at 19,425; a breach of this level might lead to a more dependable rally. Expect a range-bound trading unless a clear breakout occurs on either side.

Jatin Gedia, Sharekhan
As long as the Nifty holds above 19,250 we can expect the consolidation to continue. On the downside, 19,250 – 19,230 is the crucial support zone, while on the upside 19,450 – 19,470 shall act as a crucial resistance from a short-term perspective. Daily and hourly momentum indicators have a positive crossover, and a buy signal, however, prices are trading at a resistance and hence we shall for a price confirmation. Overall, we shall continue to maintain our negative outlook on the index for the target of 19,100.

Rahul Ghose, Founder & CEO – Hedged
The open interest data of today suggests a rangebound movement in the indices both for Nifty and Bank Nifty for the coming week’s expiry. Even as we go into the September series, the OI data is not giving any significant direction apart from the fact that 19,000 will act as a very strong base for the market. Another point is that even though OI is not giving us a definitive view for September, the texture of the market remains to sell on rally up to 19,650.

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

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