Friday, December 27, 2024

Tech View: Nifty chart shows bearish RSI crossover. What should traders do on Thursday?

Tuesday, December 24, 2024, 12:12
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Indian headline indices, Sensex and Nifty, ended with minor declines on Tuesday, dragged down by IT and bank stocks. The 30-stock BSE Sensex finished at 78,472.87, down by 67.30 points or 0.09%, while the broader Nifty50 closed at 23,727.65, declining by 25.80 points or 0.11%.”Nifty breached the critical support of the 200 DMA with volumes, which indicates the index could slide further and test the swing low of 23,300 on the downside,” said Kunal Shah, Senior Technical and Derivative Research Analyst at Mirae Asset Sharekhan. “The real pain was visible in the broader markets, where the advance-decline ratio stood at 1:4,” he added.”On the daily chart, Nifty is trading below the 20-day moving average (DMA) and the 40-day exponential moving average (DEMA) of 24,363 and 24,350, respectively. The momentum indicator has a negative crossover on the daily chart,” Shah added.The stock markets will remain closed for trading on Wednesday due to the Christmas holiday.What should traders do? Here’s what analysts have to say:Osho Krishnan, Angel OneFor the last two sessions, the 23,900 mark for Nifty has acted as significant resistance, aligning with the 200-day simple moving average (DSMA). For the upcoming monthly expiry, the 23,900–24,000 zone remains a critical hurdle, and a break above this range is required to spark positive momentum heading into the year-end. On the downside, the 23,600–23,500 range, representing the lower end of last Friday’s bearish candle, serves as immediate support.For the last two sessions, the 23,900 mark for Nifty has acted as significant resistance, aligning with the 200-day simple moving average (DSMA). For the upcoming monthly expiry, the 23,900–24,000 zone remains a critical hurdle, and a breakout beyond this range is needed to spark positive momentum heading into the year-end. On the downside, the 23,600–23,500 range, representing the lower end of last Friday’s bearish candle, serves as immediate support.Rupak De, LKP SecuritiesThe Nifty remained mostly range-bound throughout the day before closing flat. On the daily chart, the index closed below the 200-DMA for the first time in three days, confirming a short-term bearish trend. The RSI is in a bearish crossover and continues to decline, reinforcing the negative outlook. On the downside, support is placed in the 23,500–23,400 zone, while resistance is seen at 23,860.Hrishikesh Yedve, Asit C. Mehta Investment IntermediatesTechnically, Nifty attempted to cross the 200-Day Simple Moving Average (200-DSMA) hurdle but faced resistance near yesterday’s high of 23,870, forming a small red candle. The 200-DSMA is currently placed near 23,850, which will act as an immediate hurdle for the index. A sustainable move above 23,850 could push the index higher to the 24,000–24,100 levels. On the downside, 23,500 will serve as immediate support. In the short term, the index is likely to consolidate within the range of 23,500–23,850. A breakout on either side will set the future direction of the index.(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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