On the weekly chart, the index formed a small negative candle with a long lower shadow, which suggests the formation of a bullish hammer-type candle pattern at the lows.
“Such a weekly chart pattern after a reasonable decline calls for bottom reversal for the market. We observe a broadening type pattern, which is unfolding in Nifty as per weekly timeframe chart,” said Nagaraj Shetti, Technical Research Analyst,
Chart readers said the index has to hold above 17,017 zones for an up move towards 17,250 and 17,442 zone, whereas supports are placed at 16,888 and 16,750 zones.
What should traders do? Here’s what analysts said:
Since it’s the beginning of the new series, Option data is scattered at various far strikes. Maximum Call OI was at 17,000-17,500 strike, while the Maximum Put OI was at 16,000-17,600 strike. Marginal Call writing was at 17,200-17,500 strike, while marginal Put writing was seen at 17,100-16,800 strike. Options data suggests a trading range in between 16,500 to 17,600 zones due to higher volatility while an immediate trading range in between 16,800 to 17,400 zones.
Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The placement of important support and the overall chart pattern of daily and weekly signal a crucial bottom reversal at 16,747 levels. One may expect a follow-through move in the coming week. The next overhead resistances to be watched are around 17,200-17,300 levels for the next week. A sustainable move above this hurdle is likely to open doors for the 18,100 mark in the near term.
Prashanth Tapse – Research Analyst, Senior VP (Research), Mehta Equities
Nifty’s support is at the 16,747 mark, and then the downside should be well protected at the 16,477-16,438 zone. There is a bright chance that the index could bounce to 17,321 and then at the 17,727 mark with an interweek perspective.
Ajit Mishra, VP – Research, Broking
The rebound was overdue, but the key is to hold the gains amid the feeble global cues. We feel the recovery would strengthen above 17,200 in Nifty while 16,800 would continue to act as critical support. Meanwhile, participants should stay focused on overnight risk management and prefer index majors over others.
Deepak Jasani, Head of Retail Research, HDFC Securities
Nifty formed an engulfing bull pattern on daily charts while forming a bullish hammer pattern on weekly charts despite a 1.35% weekly fall. This could portend an upside bounce in the coming week, with 17,292 and 17,540 being the upside targets. The lack of breakout volumes on Sept 30 is a minor worry. 16,752-16,794 bands could provide support.
Rupak De, Senior Technical Analyst at
The daily RSI is seen to be entering a bullish crossover pattern. Going forward the trend may remain bullish with an upside potential of 17,300/17,500. On the lower end, 16,950-16,800 may continue to act as crucial support for the short term.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)