Tech view: Nifty forms long bear candles, faces pressure with persisting downtrend. How to trade on Wednesday

A long bear candle was formed on the daily chart that has decisively broken the crucial support of 23,400 levels and closed lower. Technically this pattern indicates the prevalence of strong downside momentum in the market. The bullish chart pattern formed after the recent upside bounce has been negated and the sentiment has been changed to sharply negative.

The larger degree bearish pattern like lower tops and bottoms is visible on the daily chart and the Nifty is now sliding down to form a new lower bottom below the swing low of January at 22,786 levels. However, any upside bounce from here could find strong resistance around 23,200 levels, said Nagaraj Shetti of HDFC Securities.

In the open interest (OI) data, the highest OI on the call side was observed at 23,400 and 23,300 strike prices, while on the put side, the highest OI was at 22,700 strike price followed by 22,800.

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

Satish Chandra Aluri, Lemonn Markets Desk

Benchmark indices extended their losing streak on Tuesday with sharp losses on weak global cues and tariff fears after Trump announced reciprocal tariffs this week itself with India likely to get hit. India is at a high risk from potential U.S. reciprocal levies due to its pronounced tariff differentials. Technically, the Nifty 50 is once again back at the critical support levels around 23000 failing which it can retest the 22,800 level again while on the upside, the 23,200-23,300 zone acts as the next resistance.

Rupak De, LKP Securities

The index continues to decline as it remains below the critical 21 EMA moving average. The trend remains weak; however, after a meaningful correction, the proximity to the falling wedge support could provide a reason for recovery. On the lower end, the 22,900–22,940 zone may act as strong support, while on the higher end, resistance is placed at 23,300.

Hardik Matalia, Choice Broking

On the daily chart, the Nifty index has formed a strong bearish candle for the fifth consecutive session, indicating its struggle to sustain higher levels. This pattern suggests a cautious outlook, requiring confirmation for a sustainable upside move. The market remains highly volatile. On the downside, 23,000 serves as a key support level, and a break below this mark could trigger further selling toward 22,800. On the upside, immediate resistance is seen at 23,200, with a critical hurdle near 23,300. For a continued uptrend, the Nifty must sustain above the 23,500 mark.

Hrishikesh Yedve, Asit C. Mehta Investment Interrmediates

Technically, Nifty broke the 21-Days simple moving average (DSMA) support and formed a big red candle on the daily scale, indicating weakness, though it found support near the psychological level of 23,000. Sustaining below 23,000 could extend the decline to 22,800, while resistance is placed at 23,275 where the 21-DSMA is placed. Thus, a sell-on-rise strategy should be adopted for Nifty.

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