Tech View: Nifty charts hinting at profit booking ahead. What should traders do on Wednesday

India VIX was up by 0.93% from 13.17 to 13.29 levels. Small surge in the volatility from lower levels in the last two sessions is making some swings in the market.

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

Technically, a reversal formation and bearish candle on daily charts suggest profit booking is likely to continue in the near future and the Nifty could face resistance at 18400. Below the same, the index could retest the level of 18200 and may fall up to 18150. On the flip side, above 18400, the chances of the index hitting 18450-18475 would turn bright.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities
Having moved up swiftly from the higher lows of 17553 on 21st April and the placement of key overhead resistance at the highs, the chances of a sizable downward correction are likely in the short term. Immediate supports are placed around 18100-18050 levels. Any sharp-up move above 18400 levels is expected to bring bulls back into action.Rupak De, Senior Technical Analyst at LKP Securities

Over the short term, it is expected that the Nifty will continue to exhibit weakness and could potentially drift toward the support level of 18200. A decisive drop below this support level may trigger additional selling pressure in the market. On the upside, resistance is observed at 18300 and 18500.

Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
On the daily charts, we can observe that the Nifty is trading around the lower end of the rising channel within which it has been trading for the past one and a half months.

The daily momentum indicator has triggered a negative crossover which is a sell signal. However, until the price breaks below the previous swing low of 18194, the higher top and higher bottom formation is not violated and hence we shall review our short-term stance once Nifty closes below this crucial level. From here on, stock-specific action is likely to happen and hence caution is advised.(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of the Economic Times)