Tech View: Trending move in Nifty likely after consolidation. Here’s how to trade on Wednesday 

Nifty ended the Budget day trading session 30 points lower on Tuesday to form a bullish hammer type candle pattern, signalling that bulls are trying to stage a comeback from lower levels.

The short-term trend of Nifty remains negative with high volatility. Emergence of sharp buying and the formation of a positive candle pattern on Tuesday is signalling the occurrence of a bullish reversal pattern in the coming sessions. A sustainable move above 24,650-24,700 could open the next upside towards 24,850-24,900 levels in the near term. Immediate support is at 24,100 levels, said Nagaraj Shetti of HDFC Securities.

Open Interest (OI) data showed that the highest OI on the call side was observed at 24,800 and 25,000 strike prices, while on the put side, it was at 24,300 strike price.

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

Rajesh Bhosale, Equity Technical Analyst, Angel One

We expect the index to hover within the 24,000 – 25,000 range and anticipate trending moves after some consolidation. In this scenario, it is advisable to consider entering long positions near the lower end of the range and booking profits at the mentioned resistance levels.

Hrishikesh Yedve, Asit C. Mehta Investment

Today’s low of 24,074 will act as strong support for the index. On the upside, the high of the bearish engulfing candle is placed near 24,855. Until the index conquers these levels, a sell-on-rise strategy needs to be adopted in Nifty.

Jatin Gedia, Sharekhan

On the daily charts, we can observe that Nifty has violated the higher top higher bottom formation and thus has entered a correction phase. It can correct till 24,000 – 23,800, which coincides with a Fibonacci retracement level and the 40 day moving average. The daily momentum indicator has a negative crossover which is a sell signal. Thus, the minor degree pullback towards 24550 – 24600 should be used as a selling opportunity.

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

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