NEW DELHI: The Nifty50 formed a long bearish candle on the daily charts on Thursday as the index ended with a loss of 40.5 points near the 16,800 mark on the monthly expiry day. Making lower highs and lower lows for the seventh consecutive day, the Nifty has faced resistance from its 200-DMA level.

Chart readers said the headline index is trading in a range of 16,750-17,050 levels, and either side breakout will show the direction.

“Till it remains below 16,888 zones, weakness may be seen towards 16,666 and 16,500 zones whereas hurdles are placed at 17,071 and 17,166 zones,” said Chandan

of .

In the intraday time frame, the index has formed a double top formation and conversely, it is consistently taking support at 16,800. “As long as the index trades above 16,800, the chances of a quick pullback rally is bright,” said Shrikant Chouhan of Kotak Securities.

The market, he said, is already in an oversold position, and if RBI’s rate hike on Friday is above the estimate, then we could see bouts of intra-day volatility with a negative bias for some more time.

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

Chandan Taparia, Motilal Oswal Financial Services
Since it’s the beginning of the new series, Options data is scattered at various far strikes. Maximum Call OI stood at 17,000-17,500 strikes, while Maximum Put OI was at 16,000-17,600 strikes. Call writing was seen at 17,000-17,600 strikes, while marginal Put writing was at 16,800- 16,500 strikes. Options data suggests a trading range between 16,200 to 17,500 zones due to higher volatility, while an immediate trading range lies between 16,500 to 17,200 zones.

Palak Kothari, Senior Technical Analyst, Choice Broking
Nifty50 has been trading with the support of 89-EMA. If it sustains above the same, it can show pullback in the near term. The hourly momentum indicator RSI bounced from the oversold zone. Bullish divergence was seen, indicating some upside correction can be seen. The support for Nifty has shifted around 16,700 levels, while on the upside, 17,050 may act as an immediate hurdle.

Ajit Mishra, VP – Research, Broking
The market has been making attempts for a rebound. However, weak global cues combined with continuous selling from foreign investors are weighing on the sentiment. We feel the overall tone would remain bearish until the Nifty reclaims 17,200. On the downside, a decisive break of 16,800 could further fuel the decline. Participants should align their positions accordingly and maintain positions on both sides.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
The market is already in an oversold position, and if the RBI rate hike is above the estimate, we could see bouts of intra-day volatility with a negative bias for some more time.

In the intraday time frame, the index has formed a double top formation and conversely, it is consistently taking support at 16800. As long as the index trades above 16,800, the chances of a quick pullback rally are bright. Above the same, the index could retest 16950-17000 levels. However, below 16800, the index could slip till 16700-16650.”

Rupak De, Senior Technical Analyst at
Going ahead, 16,800 is likely to act as crucial support. Any drift below 16,800 on a sustained basis may attract selling pressure in the market. On the lower end, support is visible at 16,640. On the higher end, 17,050 is likely to remain a strong resistance.

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