Tech View: Nifty forms red candle on daily chart. What traders should do on Friday

Even as the headline equity index, Nifty, ended the weekly expiry day today higher by 54 points, a small negative candle was formed on the daily chart as the opening was higher than the closing figure. This red candle indicates tiredness in the market at the highs but there is no confirmation of any negative reversal pattern.

The RSI on the daily chart gave a falling trendline breakout.

Chart readers said Nifty is now showing signs of running out of steam for the time being. The mark, 18,888, could be a tough resistance to cross while 18,678 could offer support in the near term.

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

Rupak De, Senior Technical Analyst at LKP Securities
Over the short term, the trend is likely to remain positive. On the higher end, resistance is pegged at 18,900-19,000, whereas supports are placed at 18,700/18,500.

Ajit Mishra, VP - Research, Religare Broking
We may see a bit of consolidation after the recent surge. However, upbeat global cues would keep the tone positive. Besides, improvement in the broader market participation is an added relief. Participants should continue with a positive bias and utilise pause or dip as a buying opportunity. At the same time, one should not go overboard and stick largely with the index majors and quality midcaps.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The positive chart pattern like higher tops and bottoms is intact on the daily chart and still there is no indication of any higher top reversal pattern forming at the highs. Nifty, as per weekly chart, has witnessed a sharp upside breakout of crucial resistance at the highs so far. The next upside levels to be watched are around 19,000 in the short term and immediate support is placed at 18,720 levels.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
Expansion in the hourly & the daily upper Bollinger Bands is supporting the price action on the way up. The overall structure shows that the index can continue with the uptrend & head towards the short-term target of 19,000. On the other hand, the zone of 18,700-18,600 will act as a support as per the principle of role reversal.

Manish Shah, Independent Technical Analyst
Any short-term dip in Nifty is a buying opportunity. As long as Nifty holds above 18,450, we will remain on the long side of the market. Any short-term dip towards 18,600 is a buying opportunity. On the upside, Nifty will see a continued rally towards 19,000-19,200 during the month of December.

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