Tech View: Nifty chart hints at consolidation ahead. What traders should do on Friday

While negating its higher high formation of the last four sessions, headline equity index Nifty formed a small negative candle on the daily time frame with a long upper shadow today on the weekly expiry day. Nifty charts hint at the emergence of minor weakness from the highs amidst a narrow-range movement.

The index is now placed at the lower end of the range of the last four sessions. “Now, it has to hold above 18,282 zones, for an up move towards 18,500 then 18,600 zones whereas supports are placed at 18,282 and 18,188 zones,” said Chandan Taparia of Motilal Oswal.

India VIX was down by 1.47 % from 15.10 to 14.87 levels. Volatility slightly rose during the day but overall comparative lower levels are supporting the declines to hold for bulls.

Option data suggests a broader trading range in between 18,000 to 18,800 zones while an immediate trading range in between 18,200 to 18,500 zones.

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

Manish Shah, Trader and Coach
The directional movement in Nifty remains bullish. The MACD is in a buy mode and moving averages are also showing that the uptrend is intact.

Any broad-based market cannot remain in a low volatility phase for a prolonged period of time. Sooner or later Nifty will see a directional movement. The underlying direction remains up.

A break above 18,500 will lead Nifty higher to 19,000-19,200. As long as Nifty trades above 18,250 remain on the long side.

Ajit Mishra, VP - Research, Religare Broking
The recent market structure is pointing towards the possibility of some profit taking or consolidation ahead. However, we expect Nifty to hold the 17,800-18,100 zone. The prevailing underperformance on the broader front is already hurting sentiment and it might deteriorate further during the corrective phase. We thus reiterate our view to remain selective and focus on position sizing.

Rupak De, Senior Technical Analyst at LKP Securities
Going forward, a fall below 18,300 may trigger a correction towards 18,100-18,000. On the other hand, resistance is visible at 18,450.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities
Positive chart patterns like higher tops and bottoms continued on the daily chart and further consolidation/weakness from here is likely to be a higher bottom of the sequence. At the lows, the Nifty is likely to find support at the 10-day EMA around 18,250 levels and we expect the market to show an upside bounce from the lows in the short term.

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