Tech View: Nifty forms bullish engulfing chart as expiry nears. What traders should do on Wednesday
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The near-term uptrend status of Nifty remains positive and bullish chart patterns like higher tops and bottoms are also intact. At the same time, the market is not gaining strength to witness an upside breakout of 22,200-22,300 levels decisively. The immediate resistance is at 22,300 and any dips down to 22,000-21,950 could be a buy-on-dip opportunity, said Nagaraj Shetti of HDFC Securities.
As we approach the F&O expiry day on Thursday, volatility will begin to kick in as traders will roll over their positions to the next expiry day.
Open Interest (OI) data showed the highest OI on the call side at 22,500, followed by 22,600 strike prices. On the put side, the highest OI was at the 22,000 strike price.
The hourly momentum indicator has triggered a positive crossover, which is a buy signal and thus intraday dips are likely to be bought into, chartists say.
What should traders do? Here’s what analysts said:
Rupak De, LKP Securities
The trend remains positive as the index has consistently stayed above the near-term moving average. Overall, the bulls may continue to exert control as the index has closed above the previous consolidation high. A decisive move above 22,200 might propel the index for a decent rally towards 22,400 in the near term. Support on the lower end is situated at 22,000.
Ajit Mishra, Religare Broking
The recent price action shows that bulls are consolidating their positions at record-high levels and waiting for some fresh triggers. Needless to say the buoyancy in the global market, especially the US market, is encouraging but we need alignment in heavyweights, especially in the banking majors to trigger fresh momentum. Meanwhile, traders should continue with a ‘buy on dips’ approach, with a focus on stock selection.
Tejas Shah, Technical Research, JM Financial & BlinkX
We believe that as long as the Nifty is holding above the 22,000 mark, the rally is likely to continue and it can test the next resistance zone of 22,250-300 on an immediate basis and eventually Nifty can test the level of 22,500 on the higher side. Supports for Nifty are now seen at 22,150 and 22,000 levels. On the higher side, the immediate resistance zone for Nifty is at 22,250-300 levels and the next resistance is at 22,500 mark.
(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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