“The index is stuck in a range where supports are intact but bounces are being sold. Now it requires a decisive range breakout below 16,750 or above 17,167 zones to commence the next leg of the rally,” said Chandan
of .
For Nifty traders, analysts said, 17,050 would be the key resistance level. As long as the index is trading below the same, the correction wave is likely to continue.
“The crucial lower support of 16,750-16,800 levels could be tested again. This is a negative indication. Hence, a decisive slide below 17,750 levels is likely to negate the bullish pattern created on Friday’s up move and that could eventually result in further strengthening of downside momentum in the market,” said Nagaraj Shetti, Technical Research Analyst,
Securities.
What should traders do? Here’s what analysts said:
Ajit Mishra, VP – Research,
Broking
A decisive breakdown below 16,800 in Nifty could intensify the selling. Participants should stay light and prefer defensive viz. pharma and FMCG over others for long trades.
Deepak Jasani, Head of Retail Research, HDFC Securities
Nifty now has supports on the downside at 16,747. A sustained move below this level could lead to accelerated falls. On up moves, 17,094-17,114 band could offer resistance.
Rupak De, Senior Technical Analyst at
On the daily chart, the benchmark Nifty has formed a dark cloud cover formation, suggesting a bearish reversal. Besides, the index has fallen below 200-DMA, which is again a bearish set-up. The RSI is in a bearish crossover and falling towards the oversold zone. On the lower end, the index has support at 16,800, a decisive fall below 16,800 may take Nifty towards 16,600/16,300. On the higher end, resistance is visible at 17,000/17,200.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by
The weekly chart shows that the index has once again moved down to retest its key weekly moving averages. The overall structure shows that the index has stepped into a short term consolidation mode & can see consolidation near 16,800-17,200. The internal structure shows that a move towards the upper end of the range is likely in the coming sessions.
Chandan Taparia, Motilal Oswal Financial Services
Since it’s the beginning of the new series, Option data is scattered at various far strikes. Maximum Call OI stood at 17,000-17,500 strike while Maximum Put OI was at 16,000-17,600 strikes. Marginal Call writing was at 17,000-17,100 strike while marginal Put writing was at 17,000-16,900 strike. Option data suggests a broader trading range in between 16,500 to 17,400 zones while an immediate trading range is in between 16,700 to 17,300 zones.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The short term trend of Nifty remains weak. Any sustainable move below 16,750 levels could bring sharp negative momentum on the cards. On the upside, 17,060-17,100 could act as a strong hurdle for the short term. The next important support is placed at 16,750 levels.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
