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Tech View: Nifty forms long bullish candle ahead of monthly expiration. What traders should do on Thursday

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NEW DELHI: Nifty on Wednesday rallied 213 points to comfortably surpass the hurdle at 21,600 and formed a long bullish candle on the daily chart.

Positive chart patterns such as higher highs and higher lows are intact as per the daily chart and currently, Nifty is heading towards the new higher higher formation. Yet there is no confirmation of any reversal of the highs. After breaking through the immediate resistance at 21,550 to 21,600 levels, there is scope for further upside in the near term. The next upside targets to watch are around the 22,000 to 22,200 levels next week. Immediate support is placed at the 21,300 level, said Nagaraj Shetti of HDFC Securities.

Open Interest (OI) data showed that the highest OI on the call side was seen at 22,000, followed by 21,800 strike price. On the sell side, the highest OI was at the strike price of 21,500.

What should traders do? Here’s what the analysts say:

Rajesh Bhosale, Technical Analyst, Angel One
Thanks to last week’s decline and current prices surpassing recent highs, a saucer formation is now evident on the hourly chart. According to this setup, prices could continue their short-term upward movement towards the 22,000 mark, with the 21,800-21,850 serving as immediate resistance. In contrast, bulls remain resilient, quickly buying any minor dips. Looking ahead, the bullish gap left on Wednesday around 21,500-21,480 will likely act as strong support, before that the previous resistance around 21,600, which will act as immediate support.

The upcoming session has a monthly expiration and assumes significant importance from the end of the calendar year. Expect potential price settlements and increased volatility. Traders can view this as an opportunity and explore trending trading opportunities.

Rupak De, Senior Technical Analyst at LKP Securities
Nifty saw a significant rally as Put writers accumulated substantial positions at 21,500. Additionally, the daily chart showed a breakout from consolidation. The Relative Strength Index (RSI) indicates a bullish crossover, coinciding with the index positioned above a crucial moving average. Looking ahead, the index is potentially targeting a range between 21,750 and 21,800 on the upside, with support at 21,500.

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

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