Tech View: Nifty forms high wave type candle. What traders should do on Friday

economictimes.indiatimes.com:

Nifty on Thursday ended 110 points lower to form a high wave type candle pattern on the daily chart and slipped below the rising trendline, suggesting a bearish trend reversal.
Having declined sharply, there is a possibility of a pullback rally in the short term, which is expected to be a ‘sell on rise’ opportunity. Important resistance to be watched at 21,700-21,800 levels. The important lower supports are placed at 21,200-21,000 levels, said Nagaraj Shetti of HDFC Securities.

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

Jatin Gedia, Sharekhan

Intraday, Nifty witnessed a pullback from the support zone of 21,820 – 21,300, which is likely to continue over the next few trading sessions. On the upside, the counter-trend pullback can extend till 21,600 – 21,650, where resistance in the form of the 20-day moving average is placed. In terms of levels, 21,550 – 21,570 is the immediate hurdle zone while 21,350 – 21,300 is the crucial support zone.

Ajit Mishra, SVP — Technical Research, Religare Broking

Nifty couldn’t defend the short-term moving average i.e. 20 EMA on the expected lines and came closer to the next crucial support of 21,200 level. Indications are now in favour of some consolidation after the recent fall and any rebound to 21,700-21,850 would attract fresh shorts. We thus reiterate our view to reduce positions on the rise and wait for some stability in the trend.

Rupak De, LKP Securities

Now, the trend is likely to remain weak as long as the index stays below 21,550. A decisive move above 21,550 might weaken the bears; until then, bears might control the market. On the lower end, support is placed at 21,400. A drift below 21,400 might take Nifty for a revisit to 21,250-21,200.

Sheersham Gupta,