The index formed a small body candle on the daily charts ahead of the Federal Reserve result. Indian markets will react Thursday morning.
Most analysts around the world expect interest rates to rise by 75 basis points, but an escalation in geopolitical tensions could hurt momentum, experts warn.
“Markets around the world traded with considerable volatility prior to the Fed policy announcement. A 75 basis point hike by the Fed was priced in by markets, while reports of Russian forces mobilizing in Ukraine escalated geopolitical tensions and fears of rising inflation,” said Vinod Nair, head of
The Nifty50 remained volatile ahead of the US Federal Reserve meeting outcome. The index is likely to face resistance in the 17,800-18,000 range while on the downside support is seen near 17,400-17,500.
The Nifty50 index, which opened gapped lower, has been volatile in a broader range of 175 points. It faced some weakness at higher levels but received support near the 5-DMA.
“It formed a small-bodied candle between the broader trading range on the daily scale, indicating determination. Although buying interest has been seen from lows, the lack of follow-up activity in higher zones is observed,” Chandan
Vice President, Analyst-Derivatives at Limited, said.
“Now Nifty50 needs to hold near the 17,667 zones for an upward move towards the 17,850 and 18,000 zones while support stands at the 17,550 and 17,442 zones,” he said.
The Indian VIX was up 2.79% from 18.79 to 19.32. Volatility rose ahead of global uncertainties and a tug of war between bulls and bears.
On the options front, the maximum call OI is 18,000, which will act as the key hurdle, followed by the 18,500 strikes. The maximum put OI is 17,500, which will act as strong support, followed by 17,000 strikes.
“Options data suggests a broader trading range between 17,200 and 18,200 zones, while an immediate range is between 17,500 and 18,000 zones,” suggests Taparia.
What should investors do?
Recent price action suggests momentum is fading. Although Nifty50 can find buying support at lower levels, a knee-jerk reaction below 17,700 could trigger selling pressure, technical experts warn.
On the daily chart, the index has fallen below the falling trend line, indicating that the upward movement may be faltering. “The daily RSI is in a bearish crossover on the daily chart, indicating bearish momentum,” Rupak De, Senior Technical Analyst at
“Short-term trend could remain sideways to positive as long as the index closes above 17,700. However, a decisive drop below 17,700 could trigger a correction in the market,” he added.
“On the lower end, below 17700, Nifty could drop towards 17500/17350. On the upside, resistance is seen at 17850-17900,” De recommends.
(Disclaimer: Experts’ recommendations, suggestions, views and opinions are their own. These do not represent the views of Economic Times)
https://economictimes.indiatimes.com/markets/stocks/news/tech-view-nifty-forms-small-bodied-candle-ahead-of-us-fed-outcome-what-should-investors-do-on-thursday/articleshow/94353732.cms Tech View: Nifty forms small-bodied candle ahead of US Fed outcome; what should investors do on Thursday?