Nifty’s Pullback Rally Expected to Extend – Trader Strategies for the Coming Week

Trader Strategies
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Trader Strategies: In contrast to the previous day’s decline, Nifty managed to recoup most of its losses on Friday, closing 190 points higher. This surge resulted in the formation of a long bullish candle on the daily chart.

Short-Term Nifty Trend Shifts to the Upside for Trader Strategies

The short-term trajectory of Nifty appears to have shifted in favor of an upward trend. The sustainability of this upward movement is pivotal in determining whether it signifies a significant reversal of the previous downtrend. Experts suggest that Nifty is likely to ascend further, possibly reaching the next resistance level at approximately 19,230. If weakness emerges, support could be found around the 18,850 mark, according to insights from Nagaraj Shetti of HDFC Securities.

Bullish Signals from Call and Put Writers

Trader Strategies, The maximum open interest for call options at the 19,000 strike saw call writers exiting their positions, while put writers strengthened their positions. This shift in open interest is considered a bullish signal.

What Analysts Recommend for Traders

Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas

Gedia anticipates the ongoing rebound to persist until it reaches the range of 19,160 to 19,220. This zone presents resistance due to a Fibonacci retracement level and the 40-hour moving average. Positive momentum on the hourly chart supports a buy signal. On a weekly scale, the Nifty has adhered to a support zone between 18,800 and 18,925, characterized by the 40-week average and a significant Fibonacci retracement level. Gedia suggests potential consolidation within the 18,800 to 19,200 range before the next downward movement. He highlights resistance at 19,160 to 19,220 and an immediate support zone at 18,930 to 18,900.

Rupak De, LKP Securities

De observes a temporary pause in Nifty’s decline, attributing it to an oversold chart setup. However, he notes that the index remains significantly below the critical breakdown level of 19,250. De expects a propensity for selling to persist as long as Nifty remains below this level. On the downside, a resumption of weakness is likely if Nifty falls below 18,800. De points out that put writers have substantial positions at 18,800, serving as a defense line for Nifty, with immediate support at 19,000.

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