The swing low of Friday seems to have confirmed the formation of a new higher bottom of a bullish chart pattern like higher tops and bottoms. Friday’s market movement showed a false breakdown of the recent range and is now on the verge of a potential upside breakout in the short term.
The market action of Friday is signaling a strong comeback of bulls after a choppy movement and we expect more upside in the near term. The next upside target to be watched is around 25,200 levels by next week. Immediate support is placed at 24650, said Nagaraj Shetti of HDFC Securities.
In the open interest (OI) data, the highest OI on the call side was observed at 24,800 and 24,900 strike prices, while on the put side, the highest OI was at 24,700 strike price followed by 24,600.
What should traders do? Here’s what analysts said:
Jatin Gedia, Sharekhan
The index has formed an Inside Bar candle stick pattern on the weekly charts, thus making the extremes of the previous candle i.e. 24,858 – 24,009 crucial levels to watch out for the upcoming week. We expect the pattern to break out on the upside and continue with the positive momentum towards 25,125 during the upcoming week. On the downside, 24,420 – 24,400 is the crucial support zone.The Nifty Weekly PCR witnessed an improvement from 0.70 to 1.04, suggesting a bullish sentiment. Overall, we expect positive momentum to continue.
Rupak De, LKP Securities
The equity market in India witnessed a roller-coaster session on the day of the Sensex weekly expiry. On the lower end, the Nifty found support around the neckline of the inverse Head-and-Shoulders pattern, completing a retest before rallying towards higher levels. Today’s low also coincides with the 38.2% retracement level of the previous rally. Going forward, the trend is likely to remain strong, with the potential to reach 25,000 and higher in the short term. On the lower end, support is placed at 24,550.
Devarsh Vakil, HDFC Securities
Short-term trend is bullish as it is placed above its 5, 10 and 20-day EMAs. Nifty seems to have got back its bullish momentum and is likely to head towards the next target of 25,000. Support for the index is seen at 24,500.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)