The stock market once again fell from the day's high level on Wednesday and the Nifty closed below 24500 for the second consecutive day. Although the Nifty saw a day high of 24,604, but there was such a resistance from this level that the Nifty fell and closed at the level of 24,435 after a fall of 37 points.

Nifty has formed a small positive candle with an upper wick on the daily chart. Technically, this formation indicates a bullish inverted hammer-type candle pattern, which is a sign of weakness.

A closing above the high of this pattern at 24605 in Nifty can lead to a reversal and there is a possibility of short covering in Nifty. The

The overall trend of Nifty remains weak. As per the weekly chart, an upside bounce can be expected from here or from lower levels after staying around the important support level. Only a closing above the Nifty 24,650-24,700 levels can confirm an upside bounce.

However, Nagaraj Shetti of HDFC Securities said that a fall below 24350 can drag Nifty down to the 24000 mark in the short term.

In the open interest (OI) data, the highest OI on the call side is seen at 24,600 and 24,500 strike prices, while on the put side the highest OI is at 24400 strike price followed by 24,200 strike price.

How to trade Nifty now

Rupak Dey of LKP Securities said that Nifty formed an inverted hammer pattern on the daily chart, which indicates the possibility of correction shortly. Immediate support in Nifty is at 24350, where the 38.20% Fibonacci retracement level is. Going forward, if Nifty stays above 24350, it can move towards 24700-24750 levels. Further recovery above 24,750 levels can lead to 25,250. However, if Nifty falls below 24,350, a significant correction can occur.

Hrishikesh Yedve of Asit C Mehta Investment Intermediates said that Nifty formed an inverted hammer candle on the daily chart, which is formed after the breakout of a head and shoulder pattern. This candlestick formation generally indicates strength. Thus, the 24378 level will act as a crucial short-term support. If Nifty sustains above this, it could pull back towards the 24,600-24,700 zone, which coincides with the neckline of the head and shoulders pattern.
On the other hand, if the Nifty breaks below the 24370 level, it can go down towards the 24,200-24,000 level. Traders are advised to use any bounce for profit booking considering the overall weakness.