Tech View: Nifty forms Doji candle ahead of monthly expiry. What traders should do on Thursday

Nifty on Wednesday ended 34 points higher to form a Doji candle on the daily chart, which indicates indecisiveness prevailing in the marketplace at the current juncture as it coincides with a critical resistance level of 61.8% retracement and a bearish gap.

Going ahead, 22,500 level remains a significant resistance on the monthly expiry day, but a sustained trade above 22,500-22,550 could trigger further upward movement, potentially driven by contract adjustments. Conversely, immediate support levels are identified at 22,300-22,250, with a pivotal support zone around the bullish gap of 22,200-22,180, said Rajesh Bhosale, technical analyst, Angel One.

Analysis of Nifty Put options indicates a concentration of Open Interest (OI) at 22,000 level, suggesting potential support for the ongoing expiry. On the Call side, significant OI concentrations are observed at the 22,500 and 22,700 levels, nearing all-time highs. Sustaining prices above these levels could propel the market towards the 22,800 strike prices, which might serve as resistance levels for the upcoming expiry.

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

Tejas Shah, JM Financial & BlinkX

Nifty was unable to close above our mentioned resistance zone of 22,400-500 on an immediate basis and marginal profit booking was witnessed after almost testing the upper band of our mentioned resistance zone. So we need to wait and watch, till the high (22,477) or low (22,384) of Wednesday’s daily candle is taken out for further direction on Nifty in Thursday’s trading session. Support for Nifty is now seen at 22,200 and 21,950-22,000 levels. On the higher side, immediate resistance for the index is at 22,500-mark and the next resistance is at 22,750-800 levels. Overall, till this higher high syndrome continues one should not fight the trend.

Rupak De, LKP Securities

Nifty remained sideways throughout the session before closing with a slight gain. Sentiment for the short term continues to remain positive as the index closes above the critical moving average. The positive crossover in the RSI also supports the positive momentum. On the higher end, immediate resistance is placed at 22,500. A decisive move above 22,500 might take the index towards 22,750-22,800 over the short term. Support is placed at 22,350-22,400.

Jatin Gedia, Sharekhan

On the daily charts, we can observe that Nifty has been trading around the 22,400 mark, which coincides with the 61.82% Fibonacci retracement level of the previous fall from 22,776 to 21,777 and also the lower end of the gap area formed on the 15th April. A brief consolidation is likely to continue considering the sharp run-up The hourly momentum indicator has a negative crossover, which also suggests some consolidation before it starts a new cycle on the upside. On the upside, we expect Nifty to target levels of 22,560 from short-term perspective.(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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