Tech View: Nifty forms Piercing Line candle on daily chart. How to trade on Wednesday

The underlying short-term trend of Nifty is on the verge of reversal. A decisive move above 24,500 levels could open fresh upmove in the market. Any weakness from here is expected to drag Nifty down to 23,900-800 levels again, said Nagaraj Shetti of HDFC Securities.

In the derivatives market, open interest (OI) data showed the highest OI on the call side at the 24,500 and 25,000 strike prices, while the put side registered peak OI at the 25,000 level.

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

Rupak De, Senior Technical Analyst, LKP Securities

Nifty has found support around a historical swing low for the second consecutive day. On the technical front, a Piercing Line candlestick pattern has appeared on the daily chart, suggesting a potential bullish reversal. Additionally, a positive divergence on the daily RSI further strengthens the case for an upward move. Looking ahead, a buy-on-dips strategy could benefit traders as long as Nifty stays above 24,000. On the higher side, Nifty may advance toward the 24,750-24,800 range. However, the buy-on-dips strategy has to be reviewed once Nifty falls back below 24000.

Jatin Gedia, Sharekhan

A reach above the 24368 would confirm that the trend has reversed. The daily momentum indicator has a positive crossover which is a buy signal. Thus, there are signs of a near term reversal note however it shall be confirmed only above 24368.

Hrishikesh Yedve, Asit C. Mehta Investment Interrmediates

According to the piercing line candlestick pattern, if the index crosses 24,320, the short-term pullback rally may extend to 24,500-24,600 levels. The short-term trend is down, but as long as 23,890 support holds, a relief rally may be feasible.

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