Tech View: Nifty finds support above 21-EMA. What traders should do on Wednesday

Nifty on Tuesday ended about 34 points higher to find support just above the 21-EMA on the hourly chart, prompting a strong recovery in the later part of the session.

The momentum indicator maintains a positive crossover, suggesting ongoing strength. The bullish trend is expected to persist as long as it stays above 21,350 consistently. On the upper side, Nifty is likely to encounter resistance from call writers at 21,500. A definitive breakthrough above 21,500 could potentially initiate a substantial market rally; until then, consolidation appears probable, said Rupak De of LKP Securities.

What should traders do? Here’s what analysts said:
Prashanth Tapse, Senior VP (Research), Mehta Equities
After the recent rally of growth stocks, investors are exhibiting interest in consumption stocks as a bargaining strategy. Technically, Nifty continues to have support at 21,217-20,989 and resistance at 21,651-22,001, urging investors to stay bold in exploring growth opportunities amid the super bullish market momentum.

Ajit Mishra, Religare Broking
We are seeing buying interest on every dip in the index and that reaffirms our bullish view. The defensive viz. FMCG and pharma are doing well on the expected lines. However, participation of rate sensitives would be essential to trigger the next leg of up move. Meanwhile, it is critical to identify the pattern of rotational buying across sectors and place the trading positions accordingly.

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