The index also negated last week’s bearish engulfing candle pattern on the weekly chart and now looks like moving towards the formation of a new higher top, chartists said. The momentum oscillator RSI (14) readings on the daily charts reached 70 and is now in the overbought zone.
The short-term uptrend of Nifty remains intact and the market is expected to reach up to the next resistance of 18,200-18,300 levels in the next week. Immediate support is placed at 17,900 levels, said Nagaraj Shetti of HDFC Securities.
The market would reopen on Tuesday as Monday is a trading holiday on account of Maharashtra Day.
What should traders do? Here’s what analysts said:
Rahul Ghose, Founder & CEO – Hedged
The Open Interest data of Nifty suggests that a runaway rally might not take place from here. The Nifty Index still has a lot of open interest contracts at the 18000 straddle level. This is on the short side, the credit for this is less than 400 points, which is what traders are expecting Nifty to trade in for the next one or two weeks. Nifty has also closed today at its resistance level, so the next line of action will also be based on the fact that whether Nifty gaps up above this level on Tuesday.
Amol Athawale, Technical Analyst, Kotak Securities
Nifty took support near the 200 day SMA or 17650 (Simple Moving Average) and bounced back sharply. It has also formed a long bullish candle on weekly charts, which is largely positive. As long as the index is trading above 17900 the uptrend formation is likely to continue and could move up till 18150-18250. On the flip side, below 17900, traders may prefer to exit from the long positions.
Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
On the daily charts, we can observe that it is moving towards the crucial level of 18100, which coincides with the 61.82% fibonacci retracement level of the fall from 18888 – 16828. The momentum indicator, which provided a positive crossover in yesterday’s trading session, is now providing speed to the up move. Overall, as long as the Nifty continues to trade above 17800 – 17780 support zone, we expect the positive momentum to continue.
Rupak De, Senior Technical Analyst at LKP Securities
The current rally was well predicted by the writers, as they had a decent short PE position at the 17800 strike price. On the higher end, less significant short CE built up at the higher strike prices was visible. On the higher end, Nifty might continue its upward journey till it holds above 18000 on a closing basis. Resistance on the higher end is placed at 18200, above which a further rally might come.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
