Tech View: Nifty forms two successive Doji candles. What traders should do on Wednesday

Nifty on Tuesday ended 9 points lower to form back-to-back Doji patterns on the daily chart, typically indicating a pause before the next move.

The short-term trend of the Nifty remains positive. Though Nifty is placed at the crucial overhead resistance around 22,500 levels, there is no confirmation of any reversal pattern unfolding at the highs. A decisive move above the hurdle of 22,500-22,600 levels could open more upside in the near term. Immediate support is at 22,350 levels, said Nagaraj Shetti of HDFC Securities.

Analysis of the Open Interest (OI) data highlights the highest OI on the call side at the 22,700 strike price, followed by the 22,800 strike price. On the put side, the highest OI was observed at the 22,300 strike price.

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

Rupak De, LKP Securities

The sentiment remains positive, with the Nifty closing above the important moving average. The momentum also remains positive, as indicated by the RSI in a bullish crossover. Over the short term, the trend is positive, with a potential to reach 22,650-22,700. Support is positioned at 22,350-22,300 on the lower end.

Jatin Gedia, Sharekhan

On the daily charts, we can observe that Nifty is in the process of cooling off after the sharp run-up in the previous couple of trading sessions. The zone of 22,400 – 22,350 is the crucial support zone and dips towards these zones should be used as a buying opportunity. The hourly momentum indicator has a negative crossover, which is a ‘sell’ signal and also suggests that there could be some more consolidation before the uptrend resumes. Overall, this dip should be used as a buying opportunity.

(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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