Tech View: Nifty forms bearish engulfing pattern ahead of expiry. What traders should do on Thursday

Nifty on Wednesday ended 142 factors weaker to kind a Bearish Engulfing sample on the day by day chart, indicating a possible pause within the ongoing rally.

The bullish chart sample like larger tops and bottoms continued because the per day by day timeframe chart and Wednesday’s swing excessive of twenty-two,249 may now be thought of as a brand new larger prime of the sequence. Therefore, short-term weak point could possibly be anticipated and the subsequent decrease helps to be watched at 21,850-21,750 ranges, stated Nagaraj Shetti of HDFC Securities.

Open Curiosity (OI) knowledge confirmed the Name aspect had the very best OI at 22,200, adopted by the 22,300 strike costs. On the Put aspect, the utmost OI was noticed on the 21,800 strike value.

What ought to merchants do? Right here’s what analysts stated:

Rupak De, LKP Securities

The momentum indicator RSI is exhibiting a bearish crossover, signalling weak point within the close to time period. Speedy assist is positioned at 22,000. A decisive drop under this stage could lead on the index in direction of 21,700. On the upside, resistance is recognized at 22,160.

Tejas Shah, Technical Analysis, JM Monetary & BlinkX

Nifty was unable to shut above the essential resistance zone of twenty-two,125-150 (earlier ATH space) for 2 consecutive days, which isn’t a constructive signal. The follow-up shopping for was lacking/missing in Tuesday’s buying and selling session. On the draw back, 22,000 / 21,800 are two vital helps and provided that these ranges are damaged then the short-term set-up turns barely weak. On the upper aspect, the fast resistance zone is at 22,125-150 ranges (Earlier ATH space) and the subsequent resistance for Nifty is at 22,350 stage.

Kotak Securities, Shrikant Chouhan

For day merchants now, 22,150/73,000 would act as an important resistance zone. So long as the market is buying and selling under the identical, the weak sentiment is more likely to proceed. Beneath which, the index may retest the extent of 21,935 -21,900/72,300-72,200. On the flip aspect, above 22,150/73,000 the sentiment may change. Above 22,150/73,000, the index may transfer as much as 22,250 -22,300/73,300-73,500.(Disclaimer: Suggestions, options, views and opinions given by the specialists are their very own. These don’t characterize the views of The Financial Occasions)

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