Tech View: Nifty forms long-legged Doji candle on charts. Here’s how to trade next week

Nifty continued to show range-bound action within 23,300-23,500 levels and still there is no early signs of any breakouts on either side. A decisive move above 23,500 levels is likely to open an upside breakout and a slide below 23,300 levels could mean a chance of downside breakout of the range movement in the near term, said Nagaraj Shetti of HDFC Securities.

Strong put writing was observed at 23,300 and 23,400 in Nifty. All eyes will be on the 23,500 strike in the upcoming week. Call writers have sizable positions at 23,500 strike and the option activity at this strike will provide cues about Nifty’s upcoming direction, chartists said.

The market will remain closed on Monday on account of Bakri-Eid.

What should traders do? Here’s what analysts said:

Jatin Gedia, Sharekhan

On the daily charts we can observe that the Nifty has been consolidating in the broad range of 23,200 – 23,500. The more it consolidates around this level the more likelihood of a breakout in the coming week. It has already been five days and we believe that a trending move is likely to unfold. The hourly momentum indicator has triggered a positive crossover from the equilibrium line suggesting that the consolidation has matured and can resume the next leg of up move.

Rupak De, LKP Securities

Nifty remained within the defined range of 23,300-23,500. The short-term sentiment is likely to remain more or less positive. Support levels are seen at 23,400/23,300, where put writers have built significant positions. A decisive fall below these levels might shift the market balance in favour of the bears. Until then, it’s a buy-on-dips market. On the higher end, a decisive move above 23,500 might lead to a sharp upside in the near term.

Ashwin Ramani, SAMCO Securities

Foreign Portfolio Investors (FPIs) long short ratio moved up further to 46% on 13th June from 41% on 12th June as the FPIs built significant long positions and continued to cover their short positions in the index futures for the fifth consecutive day.Nifty closed above the 23,400 level after failing to close above the same level in the previous three trading sessions.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)