Tech View: Nifty downside support getting stronger. What traders should do on Thursday

While ending with gains of 98 points, Nifty on Wednesday formed a shooting star like candle on the daily chart but is facing resistance around the 19,800-level. The positive chart pattern like higher tops and bottoms continued on the daily chart and the low of Tuesday at 19615 levels could now be considered as a new higher bottom of the sequence. But, a decisive up move from here is likely to confirm this higher bottom reversal pattern, said Nagaraj Shetti of HDFC Securities.

Nifty Futures Open Interest (OI) indicated buildup of fresh long positions after three losing trading sessions.

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 the Nifty managed to bounce from the Fibonacci support level (19,650). However, the upside got restricted by the hourly upper Bollinger band, which was placed around 19,830. The daily and the hourly momentum setup is providing divergent signals, which can lead to a consolidation in the short term. The daily Bollinger bands are also contracting which points towards a consolidation in the short term. In terms of levels, 19,615 – 19,560 shall act as a crucial support zone, and on the upside 19,830 – 19,850 shall act as an immediate hurdle zone.

Ashwin Ramani, Derivatives & Technical Analyst, SAMCO Securities

Nifty will find a strong support around 19,700 zones as short covering was observed on Wednesday, indicating that the downside support is getting stronger. The option activity at 19,800 Strike will provide additional cues about Nifty’s direction on the last day of the July series expiry.

Rupak De, LKP Securities
Throughout the trading session, Nifty showed limited movement as investors awaited the Federal Reserve’s rate decision. It found support at the 9EMA when on the lower end of the range. The daily chart indicated a downward consolidation breakout, suggesting potential downward momentum. The RSI confirmed this sentiment with a bearish crossover. Key support was identified at 19700, while resistance levels were observed at 19900/20000, providing crucial reference points for traders and investors.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities
Minor downward correction of the last few sessions seems to have completed and the market is now shifted into an upside bounce. A decisive move above 19850 is likely to open doors for a higher target of 20050 in the near term. Immediate support is at 19600 levels.

Prashanth Tapse, Senior VP (Research), Mehta Equities
Nifty’s technical landscape is now suggesting a desired consolidation with interweek support at the 19561 mark, while immediate hurdles are placed only at its psychological 20000 mark.

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