Tech View: Nifty charts blink red once again. What traders should do on Friday

NEW DELHI: Engulfing the up move of the previous session, a long bear candle was formed on the daily chart today. Technically, this pattern indicates lack of strength in the recent upside bounce and the weakness is likely to continue for the short term, said Nagaraj Shetti of HDFC Securities.

OI data indicates that on the call side, the highest OI was witnessed at 17,500 strike price while on the put side, the highest OI was at 17,000.

On the hourly charts, we can observe that the rise from the lows of 17,255 has been impulsive in nature, indicating that a short-term bottom is in place and this dip is a retracement of that rise, chart readers said.

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

Rupak De, Senior Technical Analyst at LKP Securities
On the daily chart, the Nifty continues to fall within a descending channel, suggesting continuation of the bearish trend. The momentum oscillator, RSI, is in a bearish crossover. Over the short term, the index may move towards 17,150. On the higher end, resistance is placed at 17,400.

Ajit Mishra, VP - Technical Research, Religare Broking
Global factors are largely dictating the trend and we feel a further decline in the US markets may fade away the hopes of sustained recovery. Considering the scenario, it is prudent to stay light and prefer stocks that are showing relatively higher strength. On the index front, the 17,100-17,200 zone would continue to act as strong support.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
Technically, post reversal the market witnessed non-directional activity near the 200-day SMA. For Nifty, 17,300-17,250 would be the immediate support zone while 17,450-17,500 would act as a crucial resistance zone for the traders.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The underlying trend of Nifty continues to be weak. One may expect it to retest the recent swing low of 17,250 levels in the short term. Further weakness below this support could open the next lower levels of 17,000. Any upside bounce from here could find strong resistance around 17,470 levels.

Rahul Ghose, Founder & CEO – Hedged
Traders should look for two levels on the downside — day before yesterday's low at 17,250, which when broken makes the trend sideways-to-downward and 16,740, which makes the trend completely downward.

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