Tech View: Nifty facing selloff at higher levels; volatile times ahead

NEW DELHI: Nifty on Wednesday reclaimed the 12,100 level and formed a small bullish candle on the daily chart, with a long upper wick, suggesting selling pressure at higher levels. The index needs to move past the 12,150-12,170 band to instill confidence among traders, said analysts.

“If Nifty crosses and sustains above 12,160, it would head towards the 12,200-12,230 range. However, if it breaks below 12,100, it would see selling towards 11,960-11,920 zone. The index still trades below 20- and 50-day SMAs, which are important short-term moving averages. Buy on dips stays our preferred strategy,” said Rajesh Palviya of Axis Securities.

Both daily strength indicator RSI and the momentum oscillator Stochastic have turned negative from the overbought zone and are below their respective reference lines, which indicate a negative bias, the expert said.


For the day, Nifty rose 73.70 points, or 0.61 per cent, to 12,129.

Mazhar Mohammad of Chartviewindia.in said Tuesday’s surprising strength can be attributed to the events lined up over the next few days, such as F&O expiry and Budget. He expects the index to stay volatile on Thursday and advised traders to remain neutral.

“The previous opening upside gap of January at 12,045 level seems to have offered support to the market on Tuesday. The candle pattern does not indicate any strong upside bounce. But a follow-through move could extend this pre-Budget upside till the weekend,” said Nagaraj Shetti of HDFC Securities.