Tech View: Next leg of fall may resume in Nifty. What traders should do on Wednesday

Nifty on Tuesday ended 61 points lower to form a bearish candle on the daily chart and indicate further weakness from current levels.

A decisive move above the hurdle of 19,300 could open the next upside target of 19,600 levels in the near term. Further weakness from here could find support around 19,000-18,950 levels, said Nagaraj Shetti of HDFC Securities.

OI data showed that on the call side, the highest OI was observed at 19,200 followed by 19,300 strike prices while on the put side — the highest OI was at 19,000 strike price.

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

Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas
On the daily charts, we can observe that Nifty has faced resistance at the 19,160 – 19,220 zone. Now, until today’s high of 19,234 is not taken out we can expect the Nifty to trade with a negative bias. The hourly momentum indicator has triggered a negative crossover from above the equilibrium line indicating that the pullback has matured, and a new cycle has begun. The fall shall intensify once the low of 18940 is breached on the downside and should also be used as a stop loss for long positions. Overall, the pullback seems to have hit hurdles and now the next leg of the fall may resume.

Kunal Shah, Senior Technical & Derivative analyst at LKP Securities
Nifty faced a challenge after a gap-up opening, encountering strong resistance at higher levels and failing to surpass the day’s high. Currently, the index is trading within a wide range- bound by 18,900 and 19,250, and a breakout in either direction is likely to trigger trending moves. The broader trend remains negative, and only a close above 19,300 would signal a resumption of the uptrend.

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