Analysts advised traders to maintain a neutral stance on the market.
“As long as the Nifty50 does not break below 16,850, it is more likely that the lower top formed on the daily chart may end up being a minor decline. Considering these factors we suggest traders maintain a neutral to a mildly bullish outlook for the coming week. The immediate resistance on the higher side is placed at 17,800 level,” said Yesha Shah, Head of Equity Research at Samco Securities.
For the day, Nifty50 closed at 17,516.30, down 43.90 points or 0.25 per cent.
“Despite the recent upsurge, most of the momentum indicators remained in sell mode. Unless Nifty50 stabilises above the 17,462 level, the index can initially slide towards 17,244 level and a close below the level can confirm the end of the pullback rally,” said Mazhar Mohammad of Chartviewindia.in.
Mohammad said it looks prudent to remain neutral and that intraday traders can short below 17,460 for a modest target of 17,350 level.
Amol Athawale of Kotak Securities said Nifty has traded above the 50-day SMA, but is seeing profit booking near the 20-day SMA or 17,800 level.
“Nifty50 holding to the 50-day SMA level is largely positive. On weekly charts, the index has formed an upper shadow, which indicates indecisiveness between bulls and bears. However, on daily and intraday charts, the market is consistently forming higher bottom formation, which supports the uptrend. For the traders, 17,400-17,350 would be the sacrosanct support level, above which the index could continue the upmove till 17,700-17,850 level,” Athawale said.
