Take View: Nifty formed a bearish candle. what should traders do on tuesday

Headline index Nifty on Monday formed a bearish candle with a long lower shadow on the daily scale, indicating buying on the downside, but was missing follow-up in higher zones. Now, it needs to hold above 17,777 zone to move towards 17888, then 17950 zone, while support lies at 17650 and 17500 zones, Chandan said.

Fear gauge index India VIX rose 7.38% to 13.68 from 12.75. The volatility negated the lower high formation of the last seven trading sessions and now a calm is needed to resume market stability.

Options data suggests a broad trading range between 17400 to 18200 zone, while an immediate trading range between 17650-17950 zone.

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

Shirkant Chauhan, Head of Equity Research (Retail), Kotak Securities
17,850 will now act as a major resistance area for the traders. Below this the Nifty may slip till 17650-17600. On the downside, a fresh bullish rally is possible only after rejection of 17850, above which the market can move to 17925-17950.

By Jatin Gedia, Technical Research Analyst, Sharekhan
Since last week, Nifty has been range-bound, and the range-bound action is likely to continue till we get a decisive move above 17850 – 17900 zone. There is a positive crossover in the Daily Momentum Indicator which is a buy signal and also suggests that buying should be done on this decline. Overall, we expect Nifty to test the upper end of the downward-sloping channel (18100) from a short-term perspective.

Ajit Mishra, VP – Technical Research, Broking
The fall in the index has pushed back the bulls a bit, but they are not out of the game just yet. A decisive close below 17650 in Nifty may reverse the bias in favor of further downside otherwise range-bound move will continue. In the meantime, we reiterate our view of focusing on stock-specific opportunities and holding positions on both sides.(Disclaimer: The recommendations, suggestions, views and opinions given by experts are their own. These do not represent the views of The Economic Times)

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