NEW DELHI: Nifty50 on Monday formed a small bearish candle on the daily chart and negated the higher highs and lows that it was making over the past three sessions. Analysts said the 17,800-17,750 levels would offer immediate support to the index while the 17,950-18,000 range may act as resistance in the short term.
Ruchit Jain of Angel One said Nifty50 has seen some consolidation and is trading around the ‘20 EMA’ on the hourly charts, which would offer immediate support on Tuesday.
“The 17,800 level would be the intraday support, below which we can see some profit booking towards the 17,700 mark. The 17,950 would be the level to watch out for on the higher side, which is where we saw resistance in the last two days. One should trade with proper risk management and look for stock-specific opportunities for better trade setups,” Jain said.
For the day, Nifty closed at 17,855, up 1.90 points or 0.01 per cent.
Mazhar Mohammad of Chartviewindia.in said if Nifty50 slips below the 17,800 level, it would come under pressure with initial targets placed in the bullish gap zone of 17,646-610.
“Nifty50 needs to sustain above the gap zone to retain a positive bias, as a breach of the 17,600 level on a closing basis can be considered as an initial sign of weakness. Strength will be seen if the index closes above the 17,950 level. Traders are advised to remain neutral on the long side, whereas intraday traders with high risk appetite shall consider shorting below 17,800 and look for a modest target of 17,670,” he said.
Independent analyst Manish Shah said Nifty50 took support at the previous swing high. He said the narrow range suggests that there is a mere pause in trend.
“A steep rising trendline from July low seems to be on a rising trajectory. A cluster of support from rising trendline, gap area and the T-line is around the 17,650-17,610 zone. As long as this support holds the direction in Nifty remains up. Alternatively, a break above the 17,940 level will lead to an upmove towards the 18,150-18,200 zone,” Shah said.