Tech View: 17,800 key hurdle for Nifty bulls. What traders should do on Monday

As Nifty ended below the 17,800 mark on Friday, the headline index formed a Hammer kind of candlestick formation on the weekly charts, indicating indecisiveness between bulls and bears.

Nifty has been trading near the 78.6% retracement of the entire September decline. The key Fibonacci level is near 17800. The hourly chart shows that the index is in process of forming a distribution near this key hurdle. The hourly momentum indicator has developed a negative divergence, which is a sign of exhaustion, said Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas.

The index has been trading above 21 DMA which adds bullishness to prices.

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

Rupak De, Senior Technical Analyst at LKP Securities
The consolidation continued as the index failed to give any directional move. On the daily timeframe, the index has sustained above the crucial moving average, confirming the short term uptrend. Over the short term, the trend may remain sideways to positive. On the lower end, support is visible at 17700/17550; resistance on the higher end is placed at 17850/17950.

Manish Shah, Independent trader and coach
Trend following indicators still show a basic uptrend. In the last 4 days, Nifty traded in a narrow band of 17850-17650. A break above 17850 will lead Nifty higher to 18000-18100. The crucial level to watch out for is if the Nifty will break above 18000-18100 and how will the market behave in that area.

Ajit Mishra, VP - Research, Religare Broking
We may see further consolidation in the index and expect a similar trend on the global front as well. After the recent outperformance, banking may also take a breather and index majors from other sectors are likely to fill in the gap. Participants should maintain their focus on sector/stock selection and utilise dips to add during consolidation.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas
The overall structure shows that the next move down could be around the corner. The immediate support zone is at 17720-17700. Once that is breached then the index can tumble towards 17500 in the short term.

Amol Athawale, Deputy Vice President - Technical Research, Kotak Securities
Technically, the Nifty is consistently facing resistance between 17800 to 17850 levels. The level of 17800 would act as a key resistance zone for traders, and above the same, the index could rally till 18000-18100. On the flip side, below 17600, the selling pressure is likely to increase and could retest the 50-day SMA (simple moving average) or 17500. Further downside could drag the index till 17400.

Prashanth Tapse - Research Analyst, Senior VP (Research), Mehta Equities
Markets raced ahead as bulls were seen enthusiastic with immediate inter-week goal posts for Nifty seen at the psychological 18000 mark. Above 18000, the benchmark Nifty will aim for its all-time-high at the 18605 mark. The immediate hurdle is seen at 18100, while support is seen at 17407-17589.

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