The short-term trend of Nifty is down and one may expect more weakness in the short term. The next important support zone to be watched is around 20,950-20,850 levels, which are coinciding with supports of the previous up gap of Dec 14, swing low of Dec 21, and also 38.2% Fibonacci retracement of Oct 23 bottom to Jan 24 top. Immediate resistance is at 21,400 levels, said Nagaraj Shetti of HDFC Securities.
What should traders do? Here’s what analysts said:
Ajit Mishra, SVP – Technical Research, Religare Broking
The pace of decline shows more pain ahead and the 20,800-21,000 zone may offer some support. Earlier, we were seeing private banking majors facing the heat but it is now cascading to the other sectors and also to the broader indices. We thus recommend keeping a check on leveraged positions and maintaining shorts too.
Sheersham Gupta, Director and Senior Technical Analyst at Rupeezy
On the technical charts, Nifty formed a huge bearish engulfing candlestick. It broke the crucial support of 21,300 with a head and shoulder pattern. Now the next support lies at 21,000 coinciding with the 50-day moving average (DMA). If broken, Nifty may see a big correction as there lies no major support.
Rupak De, Senior Technical Analyst, LKP Securities
A few days of consolidation have led to a decline, with Nifty slipping below the lower end of the recent consolidation range. The bearish sentiment appears to be strengthening as Nifty closed at its lowest points on multiple days. Weakness may persist in the short term, with support at 21,200; below this level, the index could potentially decline towards 21,000 and beyond. Looking ahead, the market may continue to be a “sell on rise” scenario as long as it remains below 21,500.
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(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)