Tech View: Nifty bulls in buy-the-dip mode. What traders should do on Wednesday

Nifty on Tuesday ended 80 points higher to form a small red candle with a small lower shadow on the daily charts.

The short-term trend of Nifty continues to be positive with rangebound action. Nifty is expected to face a patchy road ahead on the upside, as it could encounter multiple resistances like 19,850 (previous swing high), 19,950 (up trend line hurdle), and 20,115 (previous opening down gap) in the near term. Immediate support is placed around 19,700 levels, said Nagaraj Shetti of HDFC Securities.

Open Interest (OI) data showed on the call side, the highest OI was observed at the 20,000 strike price, followed by the 19,900 strike price. On the put side, the highest OI is at the 19,700 strike price.

The daily and hourly momentum indicator has a positive crossover, which indicates that the dips should be bought into.

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

Jatin Gedia, Sharekhan by BNP Paribas
On the daily charts, the Nifty broke the Inside bar pattern on the upside which has bullish implications. On the upside, the index is likely to continue its rally towards 19,883 and beyond that potentially towards 20,030. On the downside, the key hourly moving averages placed in the range of 19,770 – 19,750 are likely to act as a cushion in case of a dip.

Shrikant Chouhan, Head of Research (Retail), Kotak Securities
Nifty is trading above 19,750 and above the same, the index could rally till 19,900-19,935. On the flip side, below 19,750, the uptrend would be vulnerable and could slip to 19,700-19,675.

Rupak De, LKP Securities
The short-term trend remains strong as the index sustains above critical moving averages on the daily timeframe. A “buy on dips” strategy is favored as long as it remains above 19,550. On the higher end, it might move towards 20,000-20,200.

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