Tech View: Nifty forms Hammer candle, holds 22,725 support. How to trade on Wednesday
Technically, on a daily scale, Nifty has formed a Hammer candlestick pattern near multiple support zones, indicating strength. As long as the index holds the recent low of 22,725, a buy-on-dips strategy remains favorable. The 21-day simple moving average (DSMA) at 23,240 acts as an immediate hurdle, and a decisive move above this level could confirm a near-term bottom reversal, said Hrishikesh Yedve of Asit C. Mehta Investment Interrmediates.
In the open interest (OI) data, the highest OI on the call side was observed at 23,200 and 23,000 strike prices, while on the put side, the highest OI was at 22,700 strike price followed by 22,900.
What should traders do? Here’s what analysts said:
Nandish Shah, HDFC Securities
From a technical perspective, a short-term bottom appears to be in place for now. As long as the Nifty holds above the 22,800 level on a closing basis, bearish bets should be avoided. On the upside, the 23,235 level is likely to act as a key resistance in the near term.
Rupak De, LKP Securities
Nifty witnessed another day of volatility as the index failed to take a clear direction. In the short term, Nifty might remain a ‘sell on rise’ as long as it stays below 23,150. Support is placed at 22,800, and a fall below this level might trigger further correction. Immediate resistance is placed at 23,000.
Bajaj Broking
The index has formed a high wave candle with a long lower shadow, indicating buying interest around the January lows. Over the last two sessions, it has been consolidating within a broad range of 22,700–23,000. If the index breaks above 23,000, it could lead to a pullback towards the 20-day EMA, which is around 23,230. However, if it falls below 22,700, it would suggest a further downside towards the 22,500 level.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
