Tech view: Nifty breaks 25,000 support, forms long bear candle. How to trade on Monday
Nifty formed a bearish engulfing candle on the weekly chart as it ended Friday’s trading session on a negative note. The index plunged 293 points ahead of a key US jobs report, which could influence the Federal Reserve's decisions on the pace and magnitude of interest rate cuts.
A long bear candle was formed on the daily chart, indicating a sharp downside reversal for the market. The cluster support of 25,000 has been broken decisively on the downside. This chart confirms a short-term top reversal pattern at 25,333 levels, said Nagaraj Shetti of HDFC Securities.
In the open interest (OI) data, the highest OI on the call side was observed at 25,000 and 24,900 strike prices, while on the put side, the highest OI was at 24,600 strike price followed by 24,800.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan
On the daily charts, we can observe that the Nifty on account of the fall has reached the crucial support zone 24,850 – 24,800, which coincides with the 20-day moving average and the 38.2% Fibonacci retracement level. We expect the Nifty to hold on to this support zone and hence shall continue to maintain our short-term positive stance on the Nifty. The immediate hurdle is placed at 25,000.
Hrishikesh Yedve, Asit C Mehta Investment Interrmediates
Technically, the index broke the 25,000-25,100 support zone on Friday, forming a bearish engulfing candle on the weekly scale. On the daily chart, Nifty closed below its 21-Day Exponential Moving Average (DEMA), indicating further weakness. The
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