Tech View: Nifty forms higher high, higher low series. What traders should do next week

Nifty on Friday ended flat but above the 22,200 level to form a higher high and higher low series formation on both the daily and weekly charts.

Nifty has been in a consolidation zone for over a month and we may soon see a breakout or breakdown with the former. However, for any significant rally, Nifty will have to give a decisive breakout above 22,250. The range of 22,100 – 22,130 is now the demand zone and a slide below this range can push Nifty back towards 22,000 level, said Sheersham Gupta of Rupeezy.

The highest open interest was seen in 23,000 CE, followed by 22,000 PE.

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

Om Mehra, SAMCO Securities

Nifty continued its ascent, maintaining higher highs and higher lows in the daily timeframe, above the 20 and 50 Simple Moving Averages (SMA). The Relative Strength Index (RSI) stood strong at 62. Support levels are at 22,000 and 21,900, with resistance at 22,500.

Osho Krishan, Angel One

For now, the 22,000 mark is likely to provide a firm cushion for any intra-week blip, followed by the 20 DEMA around 21,900 – 21,850, while any further blip could disrupt the intermediate trend for the index. On the higher end, finding resilience is challenging in uncharted territory, though 22,350-22,500 could be seen as the following potent targets for Nifty in the upcoming week, provided banking participates. From hereon, if Nifty has to sustain at higher levels, contribution from the heavyweight banking space is a must. Since it is struggling around the bearish gap, it is better to wait for further clarification to project higher levels.

Tejas Shah, Technical Research, JM Financial & BlinkX

Nifty closed above the crucial resistance zone of 22,125 to 22,150 levels (Previous ATH) on a weekly closing basis and we expect an upward trending activity to continue and it should move towards the next resistance level of 22,500 either continuously from the current levels or may be after a minor dip/consolidation. Support for the Nifty is now seen at 22,125-150 and 22,000 levels. On the higher side, the immediate resistance zone for Nifty is at 22,250-300 levels and the next resistance is at 22,500 mark. Overall, Nifty is likely to remain volatile within the 22,000 – 22,500 range in the near term with a positive bias.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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