Tech View: Nifty forms Shooting Star candle. What traders should do on Tuesday
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The larger degree positive chart pattern like higher tops and bottoms is intact on the weekly chart and present weakness could be in line with the formation of a new higher bottom of the pattern. Still, there is no confirmation of any higher bottom reversal yet at the lows.
Nifty is currently nearing weekly 10-period EMA around 22,200 levels. The said moving average has offered support for the market in the last few months, said Nagaraj Shetti, senior technical research analyst at HDFC Securities.
The daily momentum indicator has triggered a fresh negative crossover, which is a sell signal.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan
On the daily chart, we can observe that the Nifty is in the process of retracing the rise it has witnessed from 22,710 – 22,776. The key 50 and 61.82% Fibonacci retracement levels are placed at 22,240 – 22,117. Thus, in case of a bounce towards 22,350 – 22,370, it should be used as a selling opportunity. On the upside, the gap area formed on Monday in the range 22,420 – 22,500 shall act as an immediate hurdle from a short-term perspective.
Tejas Shah, Technical Research, JM Financial & BlinkX
Nifty closed below the crucial support levels of 22,500 in Monday’s trading session, which is not a healthy sign. Technically, the break of 22,500 on a closing basis on the daily charts with volumes and a strong momentum has weakened the setup and that has to be taken note off. A level of 22,250 is immediate support to watch out for in the Nifty, while the bigger area of support zone stands at 22,000-100. On the higher side, immediate resistance for Nifty is at 22,350 levels and the next crucial resistance is at 22,500 Mark. Overall, Nifty is likely to remain volatile within the 22,000 – 22,500 range in the near term with a negative bias.
Rupak De, LKP Securities
Nifty recently dipped below a crucial moving average, following a breakdown in consolidation. Additionally, the Relative Strength Index (RSI) indicates a bearish crossover. Short-term sentiment appears bearish, although a significant decline isn’t anticipated at present. Instead, the index is likely to fluctuate between 22200 and 22400. Sellers are expected to persist as long as the index remains below the 22400 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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