Indicating that traders and investors are still looking for cues to make strong moves on either side, Nifty made a pattern of alternating between up and down days for the seventh consecutive day on Thursday to end 26 points lower and form a small bearish candle on Budget Day.

The index closed above the short-term 21EMA for three out of the last four days, suggesting resilience in the current bullish trend.

“A breach below 21,400 could lead prices towards recent lows of 21,100, potentially triggering further decline. Conversely, surpassing 21,850 may propel Nifty towards the 22,000-22,100 range. Given the recent irregularities, it is prudent for traders to focus on the intra-day trend to take a trade or wait for a breakthrough from the mentioned range before making bold moves,” said Rajesh Bhosale of Angel One.

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

Prashanth Tapse, Senior VP (Research), Mehta Equities
Technically, the immediate resistance for Nifty is at the 21,840 mark, whereas the immediate support is placed at 21,650. Any move below 21,650 may lead to a down-move towards 21,580 and 21,540. Major support continues to be at the 21,500 mark. For Bank Nifty, the immediate resistance is in the 46,400 to 46,600 zone, above which we can observe further upward movement towards the 47,000 level. Immediate support is, however, placed at 45,500.

Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas

On the daily charts, we can observe that the Nifty has been broadly stuck in the range of 21,200 – 21,900 for the last couple of weeks. The Nifty has been facing selling pressure at the 61.82% Fibonacci retracement level (21,747) and has been unable to close above it on a closing basis. We believe that the range-bound action is likely to continue. The daily momentum indicator has triggered a positive crossover while the hourly has a negative crossover. Moreover, prices are stuck in a range. Considering the divergent signals from price and momentum indicators, the Nifty is likely to witness range-bound price action. Key support levels are 21,550 – 21,500 while the immediate hurdle zone is placed at 21,850 – 21,900.

Ajit Mishra, SVP – Technical Research, Religare Broking

Markets are not in a hurry for the next directional move and the recent price action reaffirms our view. Traders have no option but to align their positions accordingly and focus more on stock-specific trading approaches. Though we are seeing consistent outperformance from the broader indices despite the overbought condition, we feel it is prudent to restrict exposure and prefer only quality names.

(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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