Tech View: Nifty may show resistance at 19,800. What traders should do next week
Nifty on Friday ended 108 points higher to form a bullish Doji candle on the daily chart while on the weekly scale a Dragonfly Doji pattern was noticed.
The short-term trend of Nifty has turned positive. The overall positive chart pattern indicates next overhead resistance for the Nifty around 19,800 levels for the coming week.
Any dip down to 19,550-19,500 levels could be a buying opportunity, said Nagaraj Shetti of HDFC Securities.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan by BNP Paribas
On the daily charts, we can observe that Nifty has managed to close above the 40-day moving average (19610) which is a bullish sign. We expect this pullback to continue till 19778 – 19800 where resistance in the form of the 50% Fibonacci retracement level and the 20-day moving average is placed.
In the case of a dip towards 19530 – 19580, it should be used as a buying opportunity.
Amol Athawale, Vice President — Technical Research, Kotak Securities
Technically, after a sharp fall the Nifty took support near 19350 and bounced back sharply. Currently, the index is trading near the 50-day SMA (Simple Moving Average).
As long as the index is trading above the 50-day SMA or 19575 level the positive sentiment is likely to continue.
Above the same, it could move up till 20-day SMA or 19800 and on further upside the index may also continue upsurge till 19850. On the flip side, a fresh selloff is possible only after the dismissal of 19575 and below the same, the index could retest the level of 19450-19350.
For Bank Nifty, 44000 would act as a key support zone and above the same, it could rally till the 50-day SMA or 44800-45000 levels. On the other hand, below 44000, the uptrend would be vulnerable.
Rupak
