Tech View: Nifty short-term trend choppy. What traders should do on Wednesday

Nifty on Tuesday ended 32 points higher to reclaim its level above 20-DEMA placed at 22,309 and form a small negative candle, which is indicating ongoing range bound movement in the market.

The near-term uptrend status of Nifty remains intact and the short-term trend is choppy. Further consolidation or minor dip could be a buying opportunity. A sustainable move above 22,500 could open next upside towards 22,800 levels. Immediate support is at 22,200 levels, said Nagaraj Shetti of HDFC Securities.

Analysing the Open Interest (OI) data, the highest OI on the call side was observed at the 22,500 followed by the 22,600 strike prices. Conversely, on the put side, the highest OI was recorded at the 22,100 strike price.

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

Tejas Shah, JM Financial & BlinkX

Nifty is facing a lot of resilience around 22,400-500 levels for the past couple of days on an immediate basis. We need to witness a decisive close above 22,400-500 levels for further strength in Nifty or else reversal is likely from this resistance zone. Support for the Nifty is now seen at 22,200 and 21,950-22,000 levels. On the higher side, immediate resistance for Nifty is at 22,350-375 levels and the next crucial resistance is at 22,500 mark. Overall, Nifty is likely to remain volatile within the 22,000 – 22,500 range in the near term.

Rupak De, LKP Securities
The Relative Strength Index (RSI) is showing a bullish crossover with a reading below 60. On the higher end, the range of 22350-22400 is likely to act as a resistance zone; a decisive breakout above 22400 might trigger a rally in the market. On the lower end, support is positioned at 22250; a breach below this level might weaken the bullish sentiment.

Jatin Gedia, Sharekhan

On the daily chart, we can observe that the Nifty is consolidating around the 22400 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 of April. A brief consolidation is likely considering the sharp run-up and the hourly momentum indicator turning negative suggests that there could be a few range-bound days of price action ahead. On the upside we expect Nifty to target levels of 22,560 from a 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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