NEW DELHI: Nifty50 on Tuesday formed a bearish candle with a long lower wick, reflecting buying at lower levels. But analysts are not impressed. The analysts say multiple supports are placed near the 17,600 level, but they do not rule out high volatility in the coming days. They advised traders to be cautious with their short-term trading positions.
Gaurav Ratnaparkhi of Sharekhan said the index witnessed stiff resistance near its daily upper Bollinger Band for the third consecutive session and that it has filled up the recent gap area of 17,646-17,610.
“The daily upper Bollinger Band, which has become flat, is likely to maintain pressure on the higher side. The daily momentum indicator has formed a bearish hook, suggesting weakness in the short term. Thus, Nifty is expected to witness short-term consolidation in the 17,400-17,950 range. Also, as indicated by India VIX, volatility is expected to increase over the next few sessions and there can be sharp swings in both directions,” Ratnaparkhi said.
For the day, the index closed at 17,748, down 106 points or 0.6 per cent.
Mazhar Mohammad of Chartviewindia.in said multiple supports appear to be placed around the 17,600 level apart from the bullish gap zone. “At Tuesday’s intraday low of 17,576 level, the index almost tested the lower boundary of its 26-day-old ascending channel along with the 13-day simple moving average. Despite this bounce, strength shall not be expected unless Nifty50 gets past the 17,950 level on a closing basis,” he said.
Independent analyst Manish Shah said he expects volatility to rise over the next two sessions, owing to Thursday’s expiry of September series F&O contracts. “On the upside, if Nifty50 breaks and holds above the 17,810 level, a window of opportunity would open up for a rally towards the 18,150-18,200 zone. On the lower side, a major support stands in the 17,570-17,530 range. If there is a break below this range, Nifty could drop to the 17,330 level,” Shah said.Internet Explorer Channel Network