Tech View: Nifty charts hint at recovery from support levels. What should traders do on Thursday

Nifty on Tuesday ended 125 points lower to form a bearish candle on the daily chart as it recorded losses for the third straight session.

The short-term trend remains weak. But, having placed near the cluster support of around 22,000 levels, one may expect an upside bounce from the lows in coming sessions. Immediate resistance is at 22260 levels, said Nagaraj Shetti of HDFC Securities.

The indicators are in the oversold zone on hourly charts and hence there is a strong possibility of recovery from support levels in the coming days.

OI data showed that on the call side, the highest OI was observed at 22,400 followed by 22,500 strike prices while on the put side, the highest OI was at 22,000 strike prices.

Indian equities will remain shut on Wednesday on the occasion of Ram Navami.

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

Jatin Gedia, Sharekhan

Nifty managed to close and hold above the 61.82% Fibonacci retracement level (22,117) and now we expect a relief rally over the next few trading sessions. On the upside, we expect gap areas formed in the previous couple of trading sessions to be filled up which is likely to take Nifty towards 22,420 – 22,500. On the downside, 22,080 is the crucial support level to hold for the up move to continue.

Tejas Shah, JM Financial & BlinkX

Nifty is trading near a make-or-break support zone of 22,000 to 22,100 and 200-300 points move can be expected on either side from the present level. Support for Nifty is now seen at 22,000-100 and 21,700. On the higher side, the immediate resistance zone for Nifty is at 22,250-300 levels and the next resistance is at 22,500 mark.

Rupak De, LKP Securities

Technically, the trend weakened as the index fell below the 21-EMA. However, following the sharp decline, the index may find short-term support within the 21,930-22,030 bands, where previous congestion occurred. Conversely, failure to maintain support at 21,930 could exacerbate panic in the market. On the higher end, resistance for the short term is positioned at 22,400.

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