Tech View: Nifty forms bullish engulfing candle. What should traders do on Friday

on Thursday ended 168 points higher to form a bullish engulfing candle following a series of small candles, suggesting meaningful buying activity during the day.

The hourly momentum indicator has triggered a positive crossover which is a buy signal and thus we expect the positive momentum to continue over the next few trading sessions. On the upside, the next immediate hurdle is placed at 22,776. The stop-loss for long positions should be trailed at 22,430 levels, which is the 20-hour moving average, Jatin Gedia of Sharekhan, said.

Analysis of Nifty Put options indicates a concentration of Open Interest (OI) at the 22,500 level, suggesting potential support. On the Call side, significant OI concentrations are observed at the 22,900 and 23,000 levels, nearing all-time highs.

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

Tejas Shah, JM Financial & BlinkX
Support for Nifty is now seen at 22,350 and 22,150-22,200 levels. On the higher side, immediate resistance for Nifty is at 22,625 levels and the next resistance zone is at 22,750-775 levels (Previous ATH). Overall, today’s weekly closing above or below the mentioned resistance zone of 22,400-500 will give direction for the coming week.

Rupak De, LKP Securities

Nifty continues to stay above the 21-day Exponential Moving Average (EMA), a critical near-term moving average. Additionally, the momentum indicator RSI shows a bullish crossover, indicating positive momentum in the index value. Over the short term, the index might remain strong with an upside potential, ranging between 22750-22800. On the lower end, support is placed at 22,450.

Rahul Ghose Founder & CEO, Hedged.in

The resistance of Nifty is at 22,650 to 22,850 levels. Today's upsurge was owing to the trap of writers at the 22,500 level. These writers will further cause flurry as they are present in the May expiry as well.

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

Source: Stocks-Markets-Economic Times