Tech View: Nifty forms make-or-break support at 18389. What should traders do next week

The positive chart pattern, like higher tops and bottoms continued in Nifty on the daily time frame. The present weakness could be in line with the new higher bottom of the sequence, but the higher bottom reversal needs to be confirmed, said Nagaraj Shetti, Technical Research Analyst, HDFC Securities.

Immediate support for Nifty is placed around 18450 levels, and any pullback rally could find resistance around 18750 levels.

What should traders do? Here’s what analysts said:

Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
Nifty is in the process of retracing the rise it witnessed from 18060 – 18777. The daily momentum indicator has been whipsawing and is not confirming the current rise and forming a negative divergence. The divergence needs to be confirmed with a break below the previous swing low of 18530. Until we get further confirmations on the price front, we shall continue to maintain a positive outlook on the index. On the upside, the zone of 18778 – 18800 shall act as an immediate hurdle zone for Nifty.

Prashanth Tapse, Senior VP (Research), Mehta Equities
Nifty’s key make-or-break support is seen at the 18389 mark, while the index could face resistance at 18,888 and 19,100 zones. Barring Realty & Private Banks, all the other sectoral indices ended in red, with maximum pain seen in the PSU Banking index.

Rahul Ghose, Founder & CEO – Hedged, an algorithm-powered advisory platform
Though Nifty fell today, the monthly expiry contract of the 18600 put option did not lose any open interest. This indicates that traders are confident currently of a close-by bottom in this small profit booking phase. The floor for Nifty is 18400, and the floor for Bank Nifty is at 43350, till either is taken out, the trend is up and intact. Traders on Monday should watch out for the magnitude of call writing that happens at the 44000 call level with respect to Bank Nifty to determine whether the near-term uptrend is halted for the forthcoming week.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)