A prominent bullish candle emerged on the Nifty daily chart, signaling a definitive upward breakout of the small-range movement at the 26,000 level.
Positive chart patterns, such as higher highs and lows, are evident on the daily chart, reflecting strong upside momentum in the market without any substantial downward corrections.
NIFTY’s underlying trend remains positive. Having achieved an upside target of 26,250 levels (1.618% Fibonacci Extension) on Thursday, NIFTY is now projected to move towards another upward level of 26,900 (1.786% Fibonacci Extension) over the next couple of weeks. Immediate support rests at 26,000, according to Nagaraj Shetti of HDFC Securities.
In the open interest (OI) data, the highest OI on the call side was observed at 26,250 and 26,300 strike prices, while on the put side, the highest OI was at 26,200 strike price, followed by 26,100.
Analysts’ Recommendations for Traders:
Jatin Gedia, Sharekhan:
A late surge enabled NIFTY to close in the green, up by 182 points. The daily charts indicate that NIFTY is headed towards the upper end of the rising channel at 26,560. While divergence on the momentum indicator suggests caution on long positions, the uptrend should be maintained with a trailing stop-loss at 26,000 until there are signs of price weakness.
Praveen Dwarakanath, Hedged.in:
NIFTY has broken above the psychological level of 26,000 and is moving along the Upper Bollinger band, which is a strong bullish signal. Thursday’s upward movement could also be attributed to short covering in the sold calls of Thursday’s expiry. The options writer data for October’s expiry show increased put writing at 26,000 levels, forecasting a potential rally from current levels. Immediate support for NIFTY is now at 26,000 levels, with the index potentially testing 26,500 levels soon.
Hrishikesh Yedve, Asit C. Mehta Investment Intermediates:
Technically, NIFTY has given a fresh breakout to the rising channel pattern around 26,000 and has managed to sustain above the 26,200 threshold. As long as NIFTY sustains above the breakout level of 26,000, a “buy on dips” strategy should be adopted. NIFTY had also previously broken out of a short-term rising wedge pattern, suggesting the index could test the 26,500 to 26,800 level in the short to medium term. On the downside, the psychological level of 26,000 will serve as immediate support.
Rupak De, LKP Securities:
NIFTY has broken out of consolidation on the daily timeframe, indicating increasing bullish momentum. The sentiment is expected to stay positive as the index closed above a key moving average. A drop below 26,000 might disrupt the current bullish trend, but until then, the index’s strength is likely to persist.
Disclaimer: The recommendations, suggestions, views, and opinions provided by the experts are their own and do not represent the views of Economic Times.
