Tech View: Nifty forms Bullish Harami pattern on the daily timeframe. How to trade on Tuesday

Indian headline indices ended Monday in the green riding on the performance of consumer and auto stocks. Individually, Reliance Industries (RIL) and Infosys were the biggest contributors to the gains. While the S&P BSE Sensex settled at 80,248.08, up by 445.29 or 0.56%, the broader Nifty50 closed at 24,276.05, higher by 144.95 or 0.6%.

Monday’s market movement suggests that weak GDP data had already been priced in and traders are now focusing on the Reserve Bank of India’s (RBI’s) upcoming monetary policy decision and potential rate action later this week for further cues, Gaurav Garg, Research Analyst at Lemonn said. A status quo on rate cuts is widely anticipated due to inflation concerns, the policy guidance is expected to be the market’s focal point, he opined.

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

Jateen Trivedi, LKP SecuritiesFollowing a positive morning session, the Nifty moved sideways in the afternoon, trading mostly within the 24,050-24,150 range. The sentiment appears slightly improved as the index held above 23,870. Going forward, the trend might remain sideways to positive in the short term, provided it stays above 23,870. On the higher end, resistance is observed at 24,400-24,500.

Jatin Gedia, Mirae Asset Sharekhan

Nifty moved up after absorbing the initial weakness, as the index surpassed 24,200. It formed a green candle following a bullish harami pattern on the daily timeframe. The RSI has broken out of its recent consolidation and is in a bullish crossover. Additionally, the index continues to sustain above the 21 EMA. In the short term, 24,420 remains a tough hurdle. A decisive move above this level could trigger a rally towards 24,770. On the lower end, support is placed at 24,100 and 24,000.

Hrishikesh Yedve, Asit C. Mehta Investment Intermediates

Nifty opened flat-to-positive note, experienced high volatility, but then saw buying interest at lower levels, and concluded the day on a positive note around 24,276 levels. The volatility index India VIX rose by 1.90% to 14.70, indicating an increase in market volatility.

Technically, on a daily chart, the Nifty has formed a green candle, indicating strength. On the upside, the index will find immediate hurdles near 24,350-24,360 levels. Moreover, the 50-Day exponential moving average (DEMA) is placed near 24,365. If the index manages to sustain above 24,365, the upward move can extend towards 24,550. On the downside, the index will find important support near last week’s low, which was around 23,870. As long as the index remains below 24,365, traders should focus on booking profits on bounce and wait for a fresh breakout.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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