Tech View: Nifty forms Inside Bar candle in pullback rally. What traders should do on Friday
Nifty's Inside Bar candle signals a potential trend reversal, with key support at 21,860. Analysts predict resistance at 22,200-22,250 levels. Open Interest data reveals highest OI at 22,400 and 22,500 strike price, shaping trading strategies for the upcoming sessions.
on Thursday ended 149 points higher to form an Inside Bar candle on the daily chart as it consolidated around the lower half of the previous session's candle on the daily timeframe.The positive chart pattern like higher tops and bottoms is still intact, as the Nifty managed to make a new higher swing low of 21,905 levels so far on Wednesday. As long as the last higher bottom of 21,860 is protected, the chances of significant downward reversal could be doubtful, said Nagaraj Shetti of HDFC Securities.
Open Interest (OI) data showed the call side displayed the highest OI at 22,400, followed by 22,500 strike price. On the put side, the highest OI was observed at the 22,000 strike price.
What should traders do? Here’s what analysts said:
Rupak De, LKP Securities
Nifty has closed below the 21EMA with a bearish crossover in the RSI. However, bulls managed to push the Nifty back into the rising channel by the session's end, suggesting a possibility of a bullish trend reversal. Looking ahead, the Nifty could encounter resistance in the 22,200-22,250 zone. Clearing the resistance at 22,250 might propel it towards 22,500 in the near term. Support levels are situated at 22,050-22,000.Jatin Gedia, Sharekhan
On the daily charts, we can observe that Nifty has held on to the support zone of 21,900 – 21,860 where support parameters in the form of the 40-day average and the previous swing low is placed. On the upside, the key hourly averages placed in the zone of 22,200 – 22,240 acted as a resistance and restricted further upside. In the current bounce back if Nifty manages to overlap with the level of 22,256 then the current fall shall turn out to be a corrective fall. Thus, it’s crucial how the structure pans out over the next few trading sessions.Tejas Shah, Technical Research, JM Financial & BlinkX
Nifty has formed an Inside Bar pattern on its daily chart. An Inside Bar pattern is formed when the price trades within the high and low range of the previous day, making the candle an inside day or an inside bar.So we need to wait and watch, till the high (22,205) or low (21,917) of Wednesday’s daily candle is taken out for further direction on Nifty in Thursday’s trading session. Support for the Nifty is now seen at 22,000 and 21,800-850 levels. On the higher side, an immediate resistance for Nifty is at 22,250-300 levels and the next resistance is at 22,500 Mark. Overall, today’s weekly closing above or below the mentioned support of 22,000 will give direction for the coming week.
(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
