Tech View: Nifty forms bullish Harami cross pattern on daily chart. Here are the hints for Tuesday’s trade

Indian bench indices Sensex and Nifty ended their five-day losing streak on Monday, December 23, led by banks and FMCG stocks. While the 30-share BSE Sensex rose just 498.58 points or 0.64% to end at 78,540.17, the broader Nifty50 gained 165.95 points or 0.7% to end at 23,753.45.

Commenting on Satish Chandra Aluri, day action analyst at Lemon Markets Desk, sees a bias in favor of the bears despite today’s gains. “Despite the gains, for the benchmark Nifty 50, the market closed below the crucial 23,800 and such sentiment remains biased to the downside with the next support expected around the 23,500 level,” Aluri said.

What should traders do? Here’s what analysts had to say:

Rupak De, LKP Securities

The Nifty index has formed a bullish Harami cross pattern on the daily chart, indicating a possible increase in market optimism. Also, the index closed above the 200-EMA. Going forward, a decisive move above 23,850 could trigger a smart recovery towards 24,000/24,400. On the downside, support is placed at 23,540; A break below this level could lead to further weakness in the index.

Osho Krishnan, Angel One

The benchmark index initially showed a modest recovery towards the 200-day SMA, but soon reduced profit booking, leading to a whipsaw move. Finally, the index managed to break its losing streak and settled the day with gains. Nifty’s placement certainly shows tentativeness with the price closing below the significant pivot zone of 200 DSMA. Additionally, market breadth remained bearish, highlighting the prevailing bearish sentiment in the market.

For now, the Nifty remains between 61.80 and 78.60 percent of the Fibonacci retracement of the recent rally. On the level front, 23,850-23,870 holds a critical barrier, followed by a bearish gap of 24,000-24,150, and any bounce should be seen as an opportunity to ease long bets until this zone is won. Conversely, 23,600-23,500 is likely to mitigate any shortfalls, while a breach could lead to a further correction towards 23,350 in the comparable period.

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