Tech View: Nifty May Drift Towards 23,160-23,100. Here’s How to Trade on Wednesday

The Nifty is currently navigating through a significant resistance zone at the 23,400-23,500 levels, struggling to maintain its foothold at new all-time highs. This scenario hints at a potential downward adjustment in the market. Despite ending flat on Tuesday, the emergence of a Doji candle on the daily chart suggests a minor correction might be on the horizon in the near term.

According to Nagaraj Shetti of HDFC Securities, “The index finds itself at a critical juncture, hindered by the 1.382% Fibonacci projection at the 23,400-23,500 levels, a weekly hanging man, and the downward gap from June 4th. These factors combine to challenge the market’s ability to sustain recent highs, potentially leading to a dip. Immediate support is pegged at 23,050 levels.”

Analysts observing the Open Interest (OI) data note significant activity at the 23,400 and 23,500 strike prices on the Call side. Meanwhile, on the Put side, the 23,000 strike price garners the highest OI, indicating where traders are concentrating their bets.

The hourly momentum indicator signals a negative crossover, underscoring a loss of momentum and suggesting a likely consolidation phase in the near term. Consequently, the Nifty is projected to drift towards the 23,160 – 23,100 mark in the upcoming trading sessions. Failure to hold these levels could trigger a further slide to 22,930. On the flip side, the immediate hurdle zone is identified between 23,420 – 23,500.

Traders are closely watching the 23,340-350 zone, which has proven to be a resilient barrier in the short term. “A decisive close above the 23,340-350 levels is essential for further strength in the Nifty. Without such a breakthrough, we may see profit booking from current levels,” experts opine. The support for Nifty now stands at the 23,200 & 22,950-23,000 zones. On the higher spectrum, immediate resistance is placed at 23,350, with the next significant barrier at the 23,500 mark.

With the market’s direction seemingly caught in a sideways motion due to the absence of a clear directional move, the sentiment is expected to remain neutral until a breakout occurs beyond the 23,150-23,350 range. Any decisive movement on either end could provide clarity on the market’s future trajectory. Should the breakout lean towards the upside, exceeding 23,350, the index could ascend towards 23,600. Conversely, a slip below 23,150 could see support levels revisited around 23,000-22,900.

(Disclaimer: Recommendations, suggestions, views, and opinions provided by experts are their own and do not necessarily reflect the views of the publication. These insights should not be considered as financial advice but rather as expert analysis for interested traders.)

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