Tech View: Market breadth indicates a strong bullish bias. What traders should do on Wednesday

RSI indicated a bearish crossover, suggesting a potential decline in the market. Now, Nifty has to hold above 19400 zones to extend the move towards fresh all-time high levels of 19525 and 19600 zones, while on the downside, support is intact at 19333 and 19250 zones, said Chandan Taparia of Motilal Oswal.

India VIX was down by 3.90% from 11.46 to 11.01 levels. Volatility sunk lower and is hovering near its lower band, which may support the bulls near-immediate support zones.

Options data suggests a broader trading range between 19100 to 19700 zones, while an immediate trading range between 19300 to 19550 zones.

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

Rahul K Ghose, Founder & CEO – Hedged
The Nifty derivative data is hinting towards an expiry above 19300 for both this weekly expiry and the July monthly expiry. The last few days of profit booking quickly turned around as the 19400 call writers had to run for cover this morning with the gap-up opening. On the upside, Nifty will have to cross and close above its previous high around 19520 to start its next up-move. This leg of the up-move however will be slow and not as fast-paced as the move above 18700. On Bank Nifty, the level to break on the upside is 45200 for a further up-move to happen.

Osho Krishan, Sr. Analyst, Technical & Derivative Research, Angel One
Technical speaking, the undertone suggests a strong bullish bias in the market, evident by the market breadth. Also, the longevity of the index near the higher levels indeed depicts the resilience of bulls to continue the northward journey. But, from a technical aspect, sustainable buying above the 19500-19520 zone could only open up the next leg of the rally in Nifty towards 19600-19650 on an immediate basis. Simultaneously on the downside, any dip towards the support zone of 19300 is likely to attract buyers, while the sacrosanct support lies at the bullish gap of 19200-19235 in a comparable period.Nagaraj Shetti, Technical Research Analyst, HDFC Securities
A decisive upside breakout of 19500 levels is expected to pull Nifty towards another hurdle of 19800 levels in a quick period of time. However, any weakness below 19300 levels could result in a downward correction towards the next support of 19100-19000 levels in the near term.

Rupak De, Senior Technical analyst at LKP Securities
The overall trend remained bullish as it sustained above the near-term moving average. There is a support level at 19400-19300, which might prevent further downside movement. On the upside, there is a resistance level at 19550, which could potentially limit upward movement in the market.

Shrikant Chouhan, Head of Research (Retail), Kotak Securities
On intraday charts, the Nifty has formed a double top formation, indicating temporary weakness. For intraday traders, 19500 would be the crucial breakout level, above which the market could move up to 19600-19625. However, below 19380, the selling pressure is likely to accelerate and the index could retest the level of 19300-19250.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)