Tech View: Nifty charts show buy on dips mode. What traders should do on Thursday expiry

Indicating that traders are finding ‘buy on dips’ opportunity in the market, Nifty today formed a bullish candle with a longer lower shadow. Now, till it holds above 17,700 zones, the momentum may extend towards 17,850-17,950 zones whereas supports are shifting higher at 17,635-17,525 zones, said Chandan Taparia of Motilal Oswal.

Option data suggests a broader trading range between 17,450 and 18,000 zones while an immediate trading range between 17,550 and 17,850 zones.

Chart readers said 17,800-17,850 is a key zone to watch out for as it coincides with a 61.8% retracement level and 89-EMA. However, considering the broad-based buying and fag-end surge we expect the benchmark to surpass this level and head towards 18,000 in the coming sessions.

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

Rahul Ghose, Founder & CEO – Hedged
Nifty is seen having the highest open interest at the put side of the 17,600 level and the highest open interest on the call side is seen at the 17,800 strike. Traders have created short straddles at 17,700 level for tomorrow's expiry, which is giving a credit of only Rs 85-90 at today's close. This might not be the best way to play the index for tomorrow as in the last half-an-hour, the market has already moved the index substantially and even a small gap-up tomorrow can cause trouble to these short positions. A better way to play tomorrow's expiry would be to enter the ITM call side straddle with a bought Put leg, as the bias is slightly towards the upside. This position will also help in the case of a downtick, as the bought put leg would be there to protect any loss.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Nifty formed a bullish candle, which is broadly positive. We are of the view that as long as the index is trading above 17,700 or 20-day SMA, the uptrend formation is likely to continue, above which, the market could move up to 17,850-17,875. On the flip side, below 17,700 the selling pressure is likely to accelerate. Below the same, the market could retest the level of 17,600-17,550.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The market could make an attempt to retest the key resistance again around 17,800 levels in the short term. Such repeated testing of the hurdle could eventually result in decisive upside breakout of the hurdle in the near term. Immediate support is at 17,600 levels.

Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
The hourly Bollinger bands are contracting and the hourly momentum indicator has a negative crossover, both of which indicate that a consolidation is likely before it begins a trending move. From a short-term perspective, the range of consolidation is likely to be 17,400 – 17,925.

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