Tech View: RIL may trigger next leg of rally in Nifty. What should traders do on Wednesday

Indicating indecisiveness between bulls and bears, Nifty on Tuesday formed a small-bodied bearish candle on the daily chart. The index continued to form higher highs and higher lows for the second session and gave the highest daily close of the last 93 trading sessions.A negative divergence formation was observed in the Nifty hourly time frame chart and in RSI.

Now, the index has to continue to hold above 18181 zones to witness an up move towards 18350 and 18500 zones, while on the downside supports are placed at 18181 and 18081 marks, said Chandan Taparia of Motilal Oswal.

India VIX was up by 0.30% from 12.64 to 12.67 levels. Volatility cooled off initially but closed slightly higher and made the market movement muted.

Options data suggests a broader trading range between 17800 to 18500 zones, while an immediate trading range between 18100 to 18400 zones.

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

Rahul Ghose, Founder & CEO, Hedged
The highest put open interest is at the 18000 level for the monthly expiry, which will act as a strong support for the index. For this week’s expiry, the number of call writers and put writers are very evenly poised currently, so initiating short straddles with offset units could be a good trade to play for. Another factor to watch out for is that of the big stock of Reliance. It has been in a steady uptrend and is currently at a resistance point. Whether it crosses it or not will also pave way for the next leg of rally in the index.

Rupak De, Senior Technical analyst at LKP Securities
The Nifty index traded within a tight range of 18345 and 18229 throughout the day, showing a lack of strong directional momentum. However, the index remained above critical moving averages, which could indicate underlying strength in the market. Additionally, the Relative Strength Index (RSI) showed a positive crossover, suggesting bullish momentum.

Overall, the outlook for the Nifty remains positive, with technical indicators signaling potential for further upside. The sentiment remains positive until it falls below 18200 decisively.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The short-term uptrend of Nifty remains positive, but the signs of tiredness have started to be visible at the important resistance of 18300 levels. Some more consolidation or minor downward correction is not ruled out in the short term before showing another round of upside bounce from the higher lows. Immediate support is at 18100 levels.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
As long as the index is above 18200, the positive sentiment is likely to continue and could rally till 18350-18400. On the flip side, a quick intraday correction is possible if the index trades below 18200. Below which the index could slip till 18150-18100.

Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
Considering that the index is finding resistance around 17350 and the momentum indicator also not supportive can lead to a consolidation in the short term. On the way down, Nifty can slip till 18170 – 18150 where the key hourly moving average is placed. Overall, the Nifty can witness correction in the range 18000 – 18350 from a short term perspective. In terms of levels, 18170 – 18150 shall act as a crucial support zone, while 18330 – 18350 shall act as an immediate hurdle zone for the index.

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

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