Nifty faces strong resistance at 17,800, traders say

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Nifty faces strong resistance at 17,800, traders say

On Friday, the nifty formed indecisive candles on the daily and weekly charts. Analysts said that the 50 pack index has been facing strong resistance at the 17,800 level, even though it is holding above its supports well. They said that if a breach of the 17,700 level is likely to cause some weakness towards the 17,500 level, the trend is going to be sideways to positive in the near term.

Independent analyst Manish Shah said that the trend-following indicators are still showing an uptrend. In the last four days, Nifty traded in a narrow band of 17,850 -- 17,650. A break above 17,850 will lead Nifty towards 18,000 -- 18,100, he said.

Rupak De, senior technical analyst at LKP Securities said the index did not give any directional move and that the trend may remain sideways to positive. Supports are visible at 17,700 and 17,550 levels, he said.

The index closed at 17,786 on Friday. It was a gain of 49.85 points or 0.28 per cent, up 49.85 points or 0.28 per cent. The index was up 1.2 per cent for the truncated week.

Sameet Chavan of Angel One said the market didn't capitalise on all head-starts, as the 50- pack index saw challenges around the 17,800 mark. The bulls were able to defend 17,600, which made the weekly range shrink to merely 200 points, he noted.

The market has decided to take a breather before moving on to the next leg of the rally. As far as supports are concerned, 17,600 -- 17,500 are to be treated as key levels and there is no reason to worry about until this time. On the flip side, it's a matter of time, we would see Nifty surpass 17,800 to test the psychological junction of 18,000, Chavan said.

Gaurav Ratnaparkhi, head of technical research at Sharekhan said the 50-pack index has been trading near the 78.6 per cent retracement of the entire September decline.

He said that the key Fibonacci level is near 17,800 and that Nifty didn't stretch beyond the level despite breaching it on Friday.

The index is in the process of forming a distribution near this key hurdle, according to the hourly chart. The hourly momentum indicator has developed a negative divergence, which is a sign of exhaustion. Ratnaparkhi said that once that is breached, the index can fall towards 17500 in the short term.