Having moved below the immediate support of the 10-day EMA at 19,940 levels now, the market is expected to slide down to the lower 20-day EMA around 19,780 levels in the coming sessions, according to analysts.
“The underlying trend of Nifty is weak and the overall chart pattern signals a formation of short-term top reversal pattern at the recent new highs. The Nifty is expected to test the crucial lower supports of around 19,750-19,600 levels in the near term. Any attempt of upside bounce is expected to find strong resistance around 20,050-20,100 levels,” said
Nagaraj Shetti of HDFC Securities.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan by BNP Paribas
On the daily charts, we can observe that the Nifty is in the process of retracing the rise it has witnessed from 19,223 to 20,222. On the downside, it can drift towards 19,840 where the 38.2% Fibonacci retracement level is placed. The Nifty has witnessed a faster retracement and also breached the low of 19,914 (wave IV low) which suggests that the rise from 19,223 to 20,222 has completed a wave. The daily momentum indicator still has a positive crossover however we shall assign more weightage to the price action and expect the momentum to align with the price action sooner rather than later. In terms of levels, 19,840 – 19,800 is the crucial support zone, while 20,050 – 20,100 shall act as an immediate hurdle zone.
Rupak De, Senior Technical analyst at LKP Securities
Nifty dipped below its previous swing high on the daily chart, indicating a decline in bullish sentiment. Following a period of consolidation, the index experienced a correction, which could be considered as an early indication of a bearish reversal. Additionally, a negative crossover is evident on the daily RSI. In the short term, it is probable that the Nifty will decrease toward the 19,700-19,630 range. Selling on rallies might remain a favorable strategy as long as the index remains below the 20,000 mark.
(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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