Tech View: Nifty Bank in uncharted zone as it scales new peak. What should traders do on Tuesday

While Nifty Bank ended above record high levels at 44,312, Nifty formed a small-bodied Bearish candle on the daily scale and gave the highest daily close of the last 111 sessions.

Nifty has to hold above 18,500 zone, for an up move towards 18,650 and 18,888 zones, while on the downside support exists at 18,442 and 18,333 zones, said Chandan Taparia of Motilal Oswal.

Nifty Bank is likely to face resistance at the 45,000 mark on Tuesday.

India VIX was up by 3.34% from 11.90 to 12.29 levels. Volatility was slightly up and thus giving some consolidation at the record high index levels.

Options data suggests a broader trading range between 18,300-18,800 zones, while an immediate trading range between 18,400-18,750 zones.

What should traders do? Here’s what analysts said:
Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas

The daily momentum indicator, which was lagging, has finally provided a bullish crossover which is now in sync with price action.
The daily Bollinger bands have begun to expand and with prices moving along the upper band suggests that the uptrend is likely to continue. Thus, now both price and momentum indicators are pointing towards a continuation of the positive momentum.Overall, from a short-term perspective, we expect Nifty to target levels of 18,800. In terms of levels, 18,700 – 18,800 shall act as an immediate hurdle zone, while the gap area formed today in the range of 18,500 – 18,580 shall act as a crucial support zone from a short-term perspective.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
The key support levels for the bulls are 18,550 and 18,500 while the crucial resistance areas are expected to be 18,650-18,700. Traders may consider exiting their long positions if the market falls below 18,500.

Gaurav Bissa, InCred Equities
While the overall texture of the Nifty remains strong, it can witness small profit booking on account of a bearish harmonic deep crab pattern that is formed on the hourly charts. This is expected to result in a small profit-booking with options data suggesting 18500 is a formidable support on an immediate basis.

Since Nifty Bank witnessed fresh breakouts, unlike Nifty, which has been trading considerably above the previous breakouts, one can expect strong outperformance by the banking index going forward.

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

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