Tech View: Nifty breaks above key resistance at 18,800. What should traders do next week

Making higher highs for the last 12 weeks, Nifty formed a bullish candle on the weekly frame. Now, it has to hold above 18,777 zones to witness an up move towards 18,888 and 19,000 zones, while on the downside support exists at 18,710 and 18,676 zones, said Chandan Taparia of Motilal Oswal.

India VIX was down by 2.17% from 11.08 to 10.84 levels. Volatility sank lower and supported the bulls at record-high index levels.

Options data suggests a shift in a broader trading range between 18550-19000 zones, while an immediate trading range between 18700-18900 zones.
What should traders do? Here’s what analysts said:

Rahul Ghose, Founder & CEO – Hedged

Bank Nifty on Friday tried to reverse the head and shoulder pattern formed on the daily chart. Once it crosses and closes above the 44,200 mark, this pattern would cease to hold any significance. The 43,500 sold puts for the June monthly expiry proved to be strong support for this index.

Nifty, on the other hand, has momentum on the upside with the writing of in-the-money put options in the monthly expiry and remains the more bullish index. Traders should hold on to bull spreads and bullish positions for next week and also look to initiate bullish in-the-money short straddle positions with offset for next week’s expiry.

Gaurav Bissa, VP, InCred Equities
Nifty as well as the RSI witnessed a bullish triangle pattern on the hourly charts, which can keep the strength intact. A bullish crossover has been seen in MACD, which can give additional thrust to the index going forward. Nifty traded within the striking distance of lifetime high levels and managed to close comfortably above 18,800 levels which can push the index towards 19,000 levels in the coming days.

Kunal Shah, Senior Technical & Derivative Analyst at LKP Securities
Nifty has successfully broken above the important resistance level of 18,800, indicating a bullish sign. Additionally, writers of call options at the 18,800 strike have been observed covering their positions, suggesting a positive sentiment as Nifty sustains its position above 18,800. The moving averages are below the current index value, which further supports the bullish outlook.

Furthermore, the momentum indicator has given a falling trend line breakout, indicating a potential increase in upward momentum. As long as the index remains above the support level of 17,700, the overall trend is expected to remain positive. However, a resistance level is anticipated at 19,000, which may present a challenge for further upward movement.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities
The near-term uptrend of Nifty remains intact and one may expect it to register new all-time highs in the coming week. The next upside target to be watched is around 19000-19100 levels. Immediate support is at 18700 levels.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of the Economic Times)