Tech View: Nifty forms Doji candle on weekly charts. What should traders do next week

Nifty 50 is in the process of retracing the rise it has witnessed from 22,710 to 22,776. The next crucial support level is 22,370. On the upside, 22,620–22,650 shall act as an immediate hurdle from a short-term perspective, said Jatin Gedia of Sharekhan.

on Friday ended 234 points lower to form a Doji candle on the weekly scale. On the daily charts, the index closed below the lows of the previous 3 trading sessions which indicates weakness.

The index is in the process of retracing the rise it has witnessed from 22,710–22,776. The next crucial support level stands at 22,370. On the upside, 22,620 – 22,650 shall act as an immediate hurdle from a short-term perspective, said Jatin Gedia of Sharekhan.

What should traders do? Here’s what analysts said:
Rupak De, LKP Securities
Nifty slipped lower as it experienced a consolidation breakdown in the lower timeframe. The sentiment appears somewhat negative for the short term.

However, there is observed support at 22,500 on a closing basis. As long as it stays above 22,500 on a closing basis, we do not anticipate a significant correction in the market. Sustained trading above 22,500 could potentially push the index towards 22,650-22,700 once more. Conversely, a drop below 22,500 might initiate a correction of 200-250 points on the downside.

Tejas Shah, Technical Research, JM Financial & BlinkX

The candlestick (Long-legged Doji-Bearish) pattern formed on the weekly chart is not an encouraging one. So we need to wait and watch, till the high (22,776) or low (22,503) of the weekly candle is taken out for further direction on Nifty in Monday's trading session.

The short-term moving averages are just below the price action and should continue to support the indices on any decline. Support for the Nifty is now seen at 22,500 and 22,300 levels. On the higher side, the immediate resistance for Nifty is at 22,650 levels and the next resistance is at 22,750-800 levels. Overall, it would be interesting to see whether a follow-up selling occurs today or not.

(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