Tech View: Nifty rebounds above 21-EMA. Here’s what traders should do next week

Nifty on Friday ended 30 points higher on the last trading day of Samvat 2079 to form a small green candle with a minor upper shadow on the daily charts. The weekly scale saw the formation of a small positive candle placed at the hurdle of 19,450-19,500 levels as per the concept of change in polarity.

A decisive upside breakout above 19,500 levels could open renewed buying enthusiasm towards 19,800 and higher in the near term. Any weakness from here could find support around 19,250-19,300 levels, said Nagaraj Shetti of HDFC Securities.

On the derivative front, the strike of 19,300 saw the highest addition of put open interest (OI). In contrast, the strike of 19,500 continued to possess the highest call OI, indicating immediate support and resistance.

As this Sunday coincides with the Diwali festival, stock exchanges BSE and NSE will have a special one-hour Muhurat trading session from 6:15-7:15 pm.

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

Jatin Gedia, Sharekhan
Nifty has held on to the support zone of 19,,310 – 19,270, which coincided with the gap-up area and the 40-hour moving average. Buying interest emerged from that zone, indicating that unless that is breached on the downside, we can expect the momentum to continue. The hourly momentum indicator has triggered a positive crossover from the equilibrium line indicating that the consolidation has matured, and it has started a new cycle on the upside. A decisive close above 19,500 shall lead to a further extension till 19,690. Broad market outperformance is likely to continue.

Rupak De, LKP Securities
Nifty exhibited volatility throughout the day, rebounding above the 21-day exponential moving average (EMA). However, the substantial Open Interest (OI) buildup at 19,500, particularly from Call writers, suggests a protective barrier that may impede further upward movement for Nifty. On the downside, Put writers are likely to safeguard the 19400 level. Consequently, we anticipate a market confined within a range on the Muhurat trading day.

(Disclaimer: 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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