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Technical view: Nifty chart shows bearish reversal; what traders should do on Friday

MUMBAI – The Nifty 50 ended marginally higher on Thursday, but the session witnessed volatility amid periods of profit booking. The 50-share index ended up 0.4% at 22,515 points.

On the daily chart, the index formed a hanging man pattern, indicating a potential bearish reversal in the near term, said Rupak De, senior technical analyst at LKP Securities.

“Immediate support is at 22,300; a decisive fall below this level could lead the index towards 22,000-21,900 in the short term. On the upside, resistance is seen between 22,600 and 22,650,” the analyst said.

Here’s what other analysts say about the near-term market trajectory:

Jatin Gedia, technical analyst, Sharekhan by BNP Paribas

The Nifty is heading towards the upper end of the ascending channel placed at 22700. On the other hand, the 22350-22300 zone will provide crucial support in the near term.

perspective. Minor pullbacks to support areas should be used as a buying opportunity.

Osho Krishan, Senior Analyst – Technical and Derivative Research, Angel One

The Nifty 50 started the session with a notable gap but failed to hold the higher ground and slipped to the week’s low of 22,300. However, a smart resumption of gains during the second half-year helped the index recover its losses and move closer to the pivot zone.

As we head into uncharted territory, sustainability is the primary concern and participation from wider markets is strongly considered.

From a technical perspective, closing around the 22,500 pivot zone and further buying should trigger a new leg of the index rally. In the immediate term, 200-300 points of recovery could be seen if global peers show no hindrance.

On the downside, the 22,350-22,300 area has already proven itself and is expected to act similarly, followed by the strong support of the 22,200 area during the comparable time frame.

We remain optimistic about the market tone, but advise refraining from aggressive long positions and instead using dips to take long positions in the market.

Rahul Ghose, CEO, Hedged.in

Even though Nifty and Sensex have once again reached their all-time highs, the stance that most people would tend to take is that the markets will break out from here when a new level is breached. It is very important to understand at this stage that the markets are slightly overvalued and the position should become conservative and not too bullish.

The market’s upside potential ahead of the election is capped from this level and, from a risk-reward perspective, it is best not to engage in aggressive long positions at this point.

(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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