Tech View: Clever charts suggest a bearish reversal. What should traders do on Friday

Indicating the formation of a bearish engulfment type pattern, Clever formed a long bearish candle on the daily charts today. The formation of such a pattern after a reasonable rise could be considered a bearish reversal pattern, analysts said.

F&O data showed that on the call side, the highest OI was seen at 17,700, followed by 17,800 strike prices, while on the put side, the highest OI was at 17,500 exercise prices.

The daily momentum indicator made a positive crossover. Chart readers said today’s drop may look aggravated due to the weekly expiry. Overall, the consolidation range is likely to be 17500 to 17925 from a near term perspective.

What should traders do? Here’s what analysts said:
Rahul Ghose, Founder and CEO, Hedged
Traders enter next week’s expiry with short buy positions at 17700, which also has the highest OI for next week’s expiry. Nifty is still in a broad sideways range, with 17,250 being the lower end of the range and the 18,040 level being the upper end of the range. Until these levels are removed, we expect to see up and down moves within this 800 point range.

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities
For the bulls, 17650 would act as an immediate resistance zone. Below, the index could slide to 17500-17450. On the other hand, above 17650 a slight intraday bounce could be seen up to 17700-17750.

Nagaraj Shetti, Technical Research Analyst, HDFC Securities
Nifty appears to have formed a new high below the important resistance at the 17800 levels (Feb 22nd opening bearish spread and weekly 10 and 20 period EMA), and further weakness can be expected down to the 17400 levels. short term. Any bullish bounce from here may meet resistance around the 17680-17700 levels.

Jatin Gedia, Technical Research Analyst, Sharekhan by BNP Paribas
On the daily charts, we can see that the 40-day moving average (17,764) has acted as strong resistance, and Nifty is facing selling pressure from the 17,760 – 17,800 areas. The drop in the hourly charts suggests that it is corrective. This decline should therefore not result in a trend reversal. In terms of the price pattern, the Nifty might be forming a bullish flag pattern.

(Disclaimer: The recommendations, suggestions, views and opinions given by the experts belong to them. These do not represent the views of The Economic Times)

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