Nifty on Friday settled above the 18,500 level. It formed a Bullish Engulfing candle on the weekly chart. The 50-pack index is trading close to the overbought zone as per the 14-day RSI and analysts believe the level of 18,605 may act as a key hurdle for the index while they expect the range of 18,500-450 to act as support for the index.
Chandan Taparia of Motilal Oswal Securities noted that the index has been making higher lows on the daily chart for the last four sessions. On the weekly scale, said he, the index is forming higher highs for the last six weeks.
"Nifty has to hold above 18,500 for an up move towards 18,600 and 18,881 levels. Supports for the index are placed at 18,442 and 18,250 zones," Taparia said.
Nifty closed the day at 18,512.75, up 28.65 points or 0.15 per cent. For the week, the NSE barometer was up 1.12 per cent.
Nagaraj Shetti of HDFC Securities said the daily candle signalled a breather in the market post the sharp up move of the last few sessions and this could be considered as an uptrend continuation pattern.
"After surpassing the hurdle of 18,100 a few weeks ago, the index has witnessed a decisive upside breakout of another resistance of 18,400 this week. The underlying trend continues to be positive. Nifty is expected to move into new all-time highs by the next week. A sustainable move above 18,600 is likely to pull Nifty towards the new milestone of 18,950 levels in the near term," he said.
Rupak De, Senior Technical Analyst at LKP Securities said Nifty has reached the rising trendline found by joining the preceding peaks. The momentum indicator has reached the falling trendline on the daily timeframe, he said.
"Based on the price chart and momentum indicator setup, we can infer that the index is on the verge of strong directional movement over the short term. On the lower end, a fall below 18,450 may trigger a correction towards 18,100-18,000 while a rise above 18,605 may induce a decent rally in the market," he said.
Gaurav Ratnaparkhi of Sharekhan said the all-time high of 18,604 will be the make or break level to be monitored on a closing basis, which will determine further course of action --not only from a short-term perspective but also for the medium term. The immediate support zone continues to be at 18,400-18,380, he said.
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