Tech View: 20-DEMA key support for Nifty. Here’s how to trade on Friday

economictimes.indiatimes.com:

Nifty ended Thursday expiry on a flat note but formed a bullish counterattack-type pattern on the daily chart despite a weak global trade setup. The index is currently holding immediate and key support at its 20-daily EMA, and maintaining this level will help attract bullish strength, according to chartists.

The short-term trend of Nifty continues to be choppy. The lackluster movement with weak bias is expected to continue for the next 1-2 sessions, before witnessing a sharp upside bounce from the lows. Important lower supports are to be watched around 24,100-24,000 levels and this could be a buy-on-dips opportunity. Immediate resistance is placed at 24,500 levels, said Nagaraj Shetti of HDFC Securities.

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

Jatin Gedia, Sharekhan

Nifty is undergoing a counter-trend pullback which can extend towards 24500 – 24550 which coincides with the 61.82% Fibonacci retracement level of the fall. The daily momentum indicator has a negative crossover and thus this rally is likely to fizzle out. Ideally, this rally should be sold into.

Tejas Shah, Technical Research, JM Financial & BlinkX

Nifty is making a lower low both on the daily and weekly charts, which is not a positive sign. Technically, the evidence suggests that the markets are likely to remain under pressure in the near term. The index is facing a lot of resilience around the crucial resistance of the 24,600 mark and we believe that Nifty would further outperform only if it is able to decisively close above this