Tech View: Nifty forms High Wave candle ahead of Thursday expiry. Here’s how to trade next

The immediate support of 10 Day EMA has been broken on the downside and Nifty is currently placed near another support of 20 Day EMA around 24270 levels. These moving averages have been upheld in the last 5-6 weeks and the market’s inability to sustain above these supports could eventually open sharp weakness ahead, said Nagaraj Shetti of HDFC Securities.

OI data showed that on the call side, the highest OI was observed at 24,600 followed by 24,700 strike prices while on the put side, the highest OI was at 24,300 strike price.

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

Rajesh Bhosale, Equity Technical Analyst, Angel One

For the monthly expiry session, we expect Nifty to continue trading within a range. As highlighted, the 24,300 – 24,250 zone is likely to act as support, below which the panic low of 24,050 from the Budget day could be retested. On the flip side, the high of the last two sessions around 24,600 seems a stiff hurdle, whereas the bearish engulfing high of 24,850 remains a daunting task to cross. Traders are advised to monitor these levels and set their trades accordingly.

Hrishikesh Yedve, Asit C. Mehta Investment

Technically, the index on a daily scale has formed a small bearish candle following the formation of a hammer candle yesterday. Thus, the 24,070-24,000 range will act as a demand zone for the Nifty in the short term. On the upside, the high of the bearish engulfing candle is placed near 24,855. Until the index conquers these levels, a fresh rally appears difficult for the index, in the short term.

Tejas Shah, Technical Research, JM Financial & BlinkX

Nifty formed an Inside Bar pattern on its daily chart. An Inside Bar pattern is formed when price trades within the high and low range of the previous day, making the candle an inside day or an inside bar. So we need to wait and watch, till the high (24,505) or low (24,307) of Wednesday’s daily candle is taken out for further direction on Nifty in Wednesday’s trading session. Support for the Nifty is now seen at 24,350 and 24,200 levels. On the higher side, immediate resistance for Nifty is at 24,600 levels and the next resistance is at 24,800-850 levels. Overall, Nifty is likely to consolidate or remain volatile within the 24,200–24,600 range in the near term.

Rupak De, LKP Securities

On the daily chart, a small-bodied red candle has formed. However, the short-term trend remains positive as it closed above the 21-day exponential moving average. The Relative Strength Index (RSI) is showing a bearish crossover and is declining. Weakness might increase in the market in the short term if the Nifty falls below 24,350. On the higher end, resistance is seen at 24,600. A decisive move above 24,600 could trigger a meaningful rally in the market.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)