Tech View: Nifty forms shooting star on weekly chart. What should traders do on Monday

As Nifty ended Friday’s session with a 1% loss, a bearish candle was formed with a long upper shadow on the daily chart. The weekly chart resembled a shooting star pattern, which has bearish implications.

Now, Nifty has to cross and hold above 18081 zones to witness a bounce towards 18181 and 18250 zones, while on the downside, supports are placed at 18,018 and 17,887 marks, said Chandan Taparia of Motilal Oswal.

India VIX was up by 4.82% from 11.73 to 12.29 levels. Volatility spiked during the session and closed near its upper band, which gave discomfort to the bulls.

Options data suggests a broader trading range between 17700 to 18500 zones, while an immediate trading range between 17900 to 18300 zones.

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

Amol Athawale, Technical Analyst (DVP), Kotak Securities

For traders, 18,200 would be the key resistance zone below which the market could retest the level of 17,900. On further correction, the index could slip till 17,800. On the flip side, a fresh uptrend rally is possible only after the dismissal of 18,200. Above the same, the market could move up till 18,300-18,350.

Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas

On the daily charts, we can observe that the Nifty was unable to carry on the positive momentum from the previous trading session and closed deep in the red. On the daily charts, we can observe a negative divergence, indicating a loss of momentum on the upside. We believe that the index has completed a five-wave advance at yesterday’s highs of 18,268 and now we shall expect a 38.2% retracement of the rally from 16,828 – 18,268 and hence, we change our short-term outlook on the index to negative for a target of 17,800, which coincides with the 20-day moving average.

Ruchit Jain, Lead Research,

Short-term traders should remain light on positions and watch out for the next base formation. This correction should form a higher bottom on the positional charts and once such signs are seen, it would be prudent to enter longs again. In case of price-wise correction, 17,820- 17,700 would be the range to do some bottom fishing.

Rupak De, Senior Technical Analyst at LKP Securities

A fall below 18,000 may take Nifty into the consolidation zone of 17,500–18,000. On the other hand, a rejection from the 18,000 level may reintroduce a buying spree, which may take the index back to above 18,200. A decisive move above 18,200 may take it towards 18,500–19,000.

(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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