Tech View: Nifty forms small bodied bullish candle. What traders should do on Thursday

NEW DELHI: Headline equity index Nifty today formed a small bodied bullish candle on the daily frame with a longer lower shadow, indicating support-based buying. It has been forming higher highs from the last four sessions. “Now, it has to hold above 18,350 zones, for an up move towards 18,500 then 18,600 zones whereas supports are placed at 18,250 and 18,188 zones,” said Chandan Taparia of Motilal Oswal.

Option data suggests a broader trading range in between 18,000 and 18,800 zones while an immediate trading range in between 18,200 and 18,600 zones.

Indicators such as RSI and MACD are showing strength and are sustaining.

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

Ajit Mishra, VP - Research, Religare Broking
The recent move in the index lacks decisiveness and shows an early sign of exhaustion too. However, we recommend following the trend until it reverses. We’re seeing select heavyweights and midcap counters attracting buying interest while the rest are either trading in a range or witnessing pressure. We feel it’s prudent to restrict positions and focus on overnight risk management.

Rupak De, Senior Technical Analyst at LKP Securities
Nifty has been consolidating for the last few days after a swing high breakout on the daily timeframe. However, no classic reversal pattern has formed. The short-term, moving average is sitting well below the current index value, suggesting an ongoing uptrend. The trend looks positive till it holds above 18,250. On the higher end, immediate resistance is visible at 18,440-18,450; above 18,450 the Nifty is expected to move towards 18,600-18,650.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
The current market texture is non-directional and fresh uptrend is possible only after the 18,450 breakout level. Above which, the index could hit the level of 18,550-18,600. On the flip side, dismissal of 18,350 could accelerate the selling pressure, which could see the index retest the level of 18,250-18,200.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
The volatility is likely to increase going ahead as indicated by the India VIX, which is set for a spike on the upside. 18,450-18,500 is the key zone to monitor on the higher side. On the flip side, 18,300-18,280 is a key support zone, which will decide further course of action for the index. If the Nifty breaches 18,280 on the downside, then the structure will turn in favor of the bears for the short term. The broader end of the market continues to show short-term weakness.

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