Nifty on Friday settled below the 18,900 level and recorded its first fall in nine sessions. The 50-pack index negated its higher high-low and formed a bearish candle on the daily chart. On the weekly scale, the index formed a bullish candle but with a long wick, suggesting selling at higher levels.
Gaurav Ratnaparkhi of Sharekhan said Nifty had formed a bullish Outside Bar on the weekly chart in the penultimate week and the index saw a follow-through on the upside this week.
“After rallying for eight consecutive sessions, Nifty saw profit booking on Friday. Nevertheless, it is still holding above the short-term support. The index is trading near the key hourly moving averages as well as near a rising trendline on the hourly chart. The 18,600 is a key support from where the index can start moving up again. Overall, the short-term outlook continues to be positive for a target of 19,000,” Ratnaparkhi said.
Apurva Sheth, Head of Market Perspectives, Samco Securities said the index is showing a higher top-higher-bottom formation on the daily chart, indicating a sustained-up trend. At the start of the week, he said, prices register their new lifetime high and later on continued to move higher.
“On Friday’s session, Nifty showed the first sign of profit booking when prices slipped below 18,900 level, with a bearish candle on the daily chart. The index has completed the Bearish Crab harmonic pattern at the 18,887.60 level. The momentum oscillator RSI (14) on the daily chart has reached the overbought zone and presently has hooked lower below 70. The bulls need to surpass 18,900 levels to gain bullish momentum as the options sellers are active near 19,000 levels with increased open interest,” Sheth said.
The analyst sees support for the index at 18,500 and feels that any move below the same will extend the fall to the 18,380 level.
Rupak De, Senior Technical Analyst at LKP Securities said the sentiment is likely to remain sideways, with 18,500-18,800 being the crucial range. A decisive breakout from either band may induce a clean directional move in the market, he said.