After showing a false downside breakout of 19250 levels on Thursday, the market seems to have reversed sharply on the upside, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
The formation of a bullish pattern-like inverted hammer of last week seems to have confirmed this week with sizable upside bounce in the market. Additionally, the index has broken out of a falling channel, further indicating increasing bullish sentiment, chart readers said.
What should traders do? Here’s what analysts said:
Rupak De, LKP Securities
Looking at the higher end of the spectrum, there is now a resistance level at 19,530 points. If the Nifty manages to breach this resistance, it could signal a continuation of the uptrend. On the lower end, there is strong support at 19,340 points.
Jatin Gedia, Sharekhan
On the weekly charts, the Nifty has closed in the green after falling for five consecutive weeks, which indicates that the index has reached a zone from where buying interest has emerged. Considering the above parameters, we change our short-term outlook on the index to positive. On the upside, we expect the Nifty to target levels of 19650. In terms of levels, Crucial support zone is placed at 19330 – 19300 and immediate hurdle is placed at 19520 – 19550.
Amol Athawale, Vice President – Technical Research, Kotak Securities
Technically, on daily and intraday charts, the Nifty has formed a double bottom formation, which indicates strong possibility of a fresh uptrend rally from the current levels. In addition, a long bullish candle on daily charts also supports further uptrend from the current levels. For bulls now, 19350 would act as a sacrosanct support zone.
Above the same, the index could rally till 19575. However, below 19350, the uptrend would be vulnerable and the index could slip till 19275-19220. For Bank Nifty traders, 44200 would be the crucial support level, and above the same it could move up till 44700 and 45000. On the flip side, below 44200, the index could slip till 43900-43700 levels.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)