Tech View: Nifty ends in green after 5 weekly losses. What traders should do on Monday
Nifty on Friday moved above the 21-EMA after a gap of several days and formed a long bull candle on the daily charts. On the weekly charts, a reasonable bull candle with minor lower shadow was seen.
After showing a false downside breakout of 19250 levels on Thursday, the market seems to have reversed sharply on the upside, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
The formation of a bullish pattern-like inverted hammer of last week seems to have confirmed this week with sizable upside bounce in the market.
Additionally, the index has broken out of a falling channel, further indicating increasing bullish sentiment, chart readers said.
What should traders do? Here’s what analysts said:
Rupak De, LKP Securities
Looking at the higher end of the spectrum, there is now a resistance level at 19,530 points. If the Nifty manages to breach this resistance, it could signal a continuation of the uptrend.
On the lower end, there is strong support at 19,340 points.
Jatin Gedia, Sharekhan
On the weekly charts, the Nifty has closed in the green after falling for five consecutive weeks, which indicates that the index has reached a zone from where buying interest has emerged. Considering the above parameters, we change our short-term outlook on the index to positive.
On the upside, we expect the Nifty to target levels of 19650. In terms of levels, Crucial support zone is placed at 19330 – 19300 and immediate hurdle is placed at 19520 – 19550.
Amol Athawale, Vice President — Technical Research, Kotak Securities
Technically, on daily and intraday charts, the Nifty has formed a double bottom formation, which indicates strong possibility of a fresh uptrend rally from the current levels.
