Tech View: Nifty forms Dragonfly Doji candle on charts. What traders should do on Thursday

Nifty on Wednesday ended the session 93 points lower to form a Dragonfly Doji candlestick formation, indicating a strong possibility of a relief rally from the current levels.

The short-term trend of the Nifty remains negative. A decisive close above 19,500 levels could possibly open an upside bounce towards 19,650 levels in the near term. Inability to sustain the upside bounce or a decline below 19,330 is likely to trigger fresh weakness for the market ahead, said Nagaraj Shetti of HDFC Securities.

The hourly momentum indicator is on the verge of providing a positive crossover which is a buy signal indicating that the fall is likely to halt and the probability of a pullback increases.

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

Jatin Gedia, Sharekhan by BNP Paribas
The zone of 19,320 – 19,360 is a crucial support as multiple parameters in the form of the daily lower Bollinger band and the 20-week moving average are placed. In terms of levels, 19,330 – 19,300 is the crucial support zone while 19,520 – 19,560 shall act as an immediate hurdle zone.

Rupak De, Senior Technical analyst at LKP Securities
The overall market trend remains bearish, with Nifty trading below critical moving averages. Looking ahead, the market may continue to follow a bearish trend as long as it remains below 19,500, with initial support likely around 19,330, a fall below the said level might take the Nifty towards 19250-19,200.

Shrikant Chouhan, Head of Research (Retail), Kotak Securities
For day traders, 19,380 would be the key support level to watch out for, above which the index could see the pullback rally to 19,500-19,550. On the flip side, below 19,380 the selling pressure is likely to accelerate and could slip to 19,330-19,300.

(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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