Tech View: Nifty charts hint at downside towards 16,800 levels. What should traders do next week

Nifty today formed a long bear candle on the daily and weekly charts. Chart readers said the recent swing high of 17,207 could now be considered a new lower top of the sequence.

Now, till it holds below 17,000 zones weakness could be seen towards 16,850 and 16,666 zones, while on the upside hurdles are placed at 17,071 and 17,171 levels, said Chandan Taparia of Motilal Oswal.

Fear gauge index India VIX was up by 5.18% from 14.49 to 15.24 levels. Volatility heated up after declines from the last three sessions and overall gave discomfort to the bulls.

Options data suggests a broader trading range between 16,600 to 17,300 zones, while an immediate trading range in between 16,700 to 17,150 zones.

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

Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
On the hourly charts, we can observe that Nifty is trading in the zone of 16,910 – 16,970, where the crucial Fibonacci retracement levels of the previous rise from 16,828 – 17,207 are placed. This zone shall be the make-or-break support zone, and if Nifty fails to hold on to this support, the Nifty has likely started the next leg of the fall.The daily momentum indicator has a positive crossover, which is a buy signal and is also supporting our view that the pullback rally is not complete. Considering this, we continue to maintain our positive outlook on the Nifty. On the upside, the initial hurdle is placed at 17,180 – 17,210. Beyond this it has the potential to 17,315 – 17,430.

Ajit Mishra, VP – Technical Research, Religare Broking
The recent fall has faded hopes of sustained recovery, and we might again end up seeing range-bound moves in the index. Needless to say, the major support is intact at 16,800 in Nifty. We thus reiterate our view to limit positions and maintain positions on both sides.

Rupak De, Senior Technical Analyst at LKP Securities
Nifty slipped below the crucial level of 16,950 as bears gained control of the market. Furthermore, Nifty fell after a few days of consolidation, indicating an increase in bearish bets. The momentum indicator RSI is in a bearish crossover. In the short term, the index may fall, with a potential drop to 16,750. On the higher end, resistance is visible at 17,200.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities
]The short-term trend of the Nifty continues to be weak. Immediate resistances are left unchallenged and strong supports have started to break on the downside one after another. One may expect Nifty to slide down to 16,800-16,700 levels by next week. On the upper side, the area of 17,050 could be a crucial overhead resistance.

(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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