As the headline equity index ended on a positive note for the sixth consecutive session, Nifty charts indicated that bulls are getting tired at the crucial hurdle of 17,600-17,700 levels. Nifty formed a small negative candle with a long upper shadow on the daily chart.
The bearish chart pattern like lower tops and bottoms is still active on the daily chart. “But the formation of higher bottom in the later part of March and a strong upside bounce from the lows could hint at a possibility of negation of this larger bearish setup of LT and LB in the near term,” said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.
The presence of crucial overhead resistance and an emergence of minor weakness from the highs could indicate further consolidation or minor downward correction for the Nifty from near 17,650-17,700 levels in the coming sessions, he said.
What should traders do? Here’s what analysts said:
Rupak De, Senior Technical Analyst at LKP Securities
The momentum oscillator RSI is in bullish crossover and rising. The market continues to remain buy-on-dips as long as it sustains above 17,500. On the higher end, immediate resistance is visible at 17,700; above which the index may move up towards higher levels.
Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Nifty has formed a small inverted hammer candlestick, which indicates indecisiveness between bulls and bears. Due to temporary overbought conditions, we could see some profit booking at higher levels going ahead. For Nifty, 17,525-17,550 would act as an immediate resistance area while 17,550-17,500 or the 50-day SMA (Simple Moving Average) would act as a key support zone.
Rahul Ghose, Founder & CEO – Hedged
For monthly expiry, traders continue to hold their 41,000 short straddle positions, which also indicates that the markets might give a range breakout only post 42,000 and only after the April series. Looking at the texture of both indices, one can initiate ‘bull’ spreads in the Nifty index with the May expiry, once the index closes below the 17,500 level, that is, buying on a small dip.
Rohan Patil, Technical Analyst, SAMCO Securities
The momentum oscillator RSI (14) has witnessed a breakout of a three-month-long consolidation band and the oscillator has closed above its horizontal trend line with a bullish crossover.
The validity of the bullish pattern stands above 17,300 – 17,250 levels. If in case the frontline index closes below these levels, the gate is wide open till 17,100 – 17,000 levels. On the higher end, resistance is capped at 17,750 – 17,800 levels. A break of that level will trigger a buy signal towards 18,000 levels or even higher.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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