Tech View: Nifty50 sets its eyes on 21,000-mark. What traders should do on Wednesday

MUMBAI – Aided by continued momentum, the Nifty50 ended at a record closing high for the second session on Tuesday and has formed a reasonable positive candle on the daily charts with long lower shadow.

“Technically, this pattern reflects ongoing sharp upside in the market and buy on intraday dips opportunity,” said Nagaraj Shetti, technical research analyst at HDFC Securities.

The huge opening upside gap of Monday and another opening upside gap of Tuesday remained open. As per the gap theory, the recent opening upside gaps could be considered as a bullish runaway gap, and this indicates that the Nifty50 is in the middle of a sharp uptrend, Shetti said.

On Tuesday, the 50-stock index ended 0.8% higher from the previous close at 20855.10 points. Intraday, it had touched an all-time high of 20864.05 points.

A decisive move above the immediate resistance of 20,910 levels is expected to take the Nifty50 towards the next upside target of 21,550, Shetti said, and he sees immediate support at 20,710.

Here’s what a few other technical analysts have to say about the market momentum:

Rupak De, senior technical analyst, LKP Securities
Nifty has continued its upward momentum, marking gains for the sixth consecutive day. The prevailing trend stays positive, supported by the critical moving average. The RSI’s bullish crossover signifies a positive momentum.

Towards higher levels, Nifty faces resistance at 21,000, a zone where significant call writers have positioned themselves. Conversely, support is situated at 20,700 on the lower end.

Jatin Gedia, technical research analyst, Sharekhan by BNP Paribas
On the daily charts, we can observe a long lower shadow, indicating that there is buying interest at lower levels around the zone of 20,720–20,700. The hourly momentum indicator has triggered a negative crossover, which is a sign of loss of momentum on the upside. However, until prices show evidence of a correction, we shall continue to ride the up move with a trailing stop loss mechanism.

On the upside 21,000-21,060 shall act as an immediate hurdle zone and 20,720-20,700 shall act as a crucial support zone and should also be kept as a trailing stop loss for the longs on the index.

Om Mehra, technical analyst, SAMCO Securities
The consistent trend of gap-ups in the past five sessions signals a robust market breadth, emphasizing the underlying strength.

Despite the relative strength index (RSI) indicator touching 83 levels, the absence of a divergence in the hourly chart suggests sustained momentum. Notably, the index’s breakout from the megaphone pattern offers a solid technical foundation.

(Subscribe to ETMarkets WhatsApp channel)

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