Tech View: Nifty charts hint at sideways movement ahead. What traders should do on Tuesday

Nifty on Monday fashioned a bearish engulfing candle because it ended 82 factors decrease after witnessing follow-through promoting strain from the higher boundary at 22,000.

Current weak spot is unlikely to wreck the near-term uptrend standing of the market and one might anticipate possibilities of an upside bounce from the decrease ranges. Rapid assist is to be watched round 21,600-21,500 ranges, stated Nagaraj Shetti of HDFC Securities.

OI knowledge confirmed that on the Name facet, the very best OI was noticed at 22,000 adopted by 22,100 strike costs whereas on the Put facet, the very best OI was at 21,500 strike value.

On the hourly momentum indicator, chart readers famous a detrimental divergence, which indicated a lack of momentum on the upside.

What ought to merchants do? Right here’s what analysts stated:

Jatin Gedia, technical analysis analyst at Sharekhan by BNP Paribas

General, the range-bound buying and selling motion is prone to proceed till we get a decisive shut beneath the extremes of the broad vary 22,000 – 21,200. The momentum setup on the day by day and hourly timeframes gives divergent alerts, which once more suggests sideways value motion. Thus, parameters counsel that the consolidation is prone to proceed. Inventory-specific motion and sector rotation are prone to proceed throughout this era of consolidation. Key assist ranges are 21,640 – 21,600 whereas the rapid hurdle zone is positioned at 21,950 – 22,000.

Om Mehra, Samco Securities

The formidable higher Bollinger band is a strong resistance, positioned at roughly 22,000. Moreover, 21,950 stays the extent from the place the Nifty has slipped within the earlier two periods. It could be necessary to be careful for these ranges within the coming periods.

Ajit Mishra, SVP – Technical Analysis, Religare Broking

Indications are in favour of consolidation to proceed and anticipate Nifty to respect 21,450-21,600 zone in case the revenue -taking extends. Curiously, the prevailing buoyancy within the PSU pack and broader indices has not been impacted to date however we really feel merchants ought to now keep warning whereas chasing the momentum and preserve an exit plan in place.

Kunal Shah, LKP Securities

The Nifty index has fashioned a double-top sample on the day by day chart, signalling a possible cautionary stance for merchants. The resistance stage is recognized at 22,200, and a decisive break above this on a closing foundation might invalidate the bearish outlook. Conversely, the assist for the index is located at 21,650, coinciding with its 20-DMA (20-day transferring common). A breach beneath this assist stage may intensify promoting strain available in the market.

(Disclaimer: Suggestions, recommendations, views and opinions given by the specialists are their very own. These don’t characterize the views of The Financial Occasions)

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