Tech view: Nifty’s movement in 17,500- 17,600 zone will decide future course

Nifty50 opened with gains in the morning at 17,524.40 but soon fell to a low of 17,379.60 before rising to the day’s high of 17,543.25. The index eventually settled at 17,516.85, up 47 points or 0.27 per cent.

“The Nifty witnessed a tough battle between the bulls and the bears near the key hurdle zone of 17,500-17,600. With the recent bounce, the index has reached its crucial daily moving averages, which acted as a cap for the day,” said Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas.

The 17,500-17,600 zone that had acted as a strong resistance in the recent past, induced the bears into action. Thus, it is vital to monitor the price action at this range, said technical analysts.

“If Nifty crosses the level of 17,600 on a closing basis, then it will allow the index to march further towards 18,000. On the other hand, failure to hold the ground over here will push the index down to 17,300-17,250 in order to fill up a recent gap area on the daily chart,” Ratnaparkhi added.

Mazhar Mohammad, Chief Strategist – Technical Research, Chartviewindia.in, said the Dragonfly Doji kind of formation is usually witnessed around turning points.

“Hence, for more strength, it needs to sustain above 17,379 levels and trade beyond 17,540. In that scenario, it can head towards 17,800 levels. However, if it trades below 17,379 in the next session then it should come under selling pressure on an intraday basis with initial targets present in the zone of 17,308-17,251 levels,” said Mohammad.

India VIX, the indicator of future volatility, eased further 3.83 per cent to 16.60. The index has tanked significantly in the last three days.