Tech View: Nifty forms long bull candle with minor shadow. What should traders do on Monday?

Reserve Bank of India’s (RBI) CRR cut temporarily lifted markets mood but they eventually finished with declines, ending their five sessions gaining streak. Bank and IT stocks dragged headline indices, the most. While the S&P BSE Sensex settled at 81,709.12, down by 56.74 or 0.07%, the broader Nifty50 closed at 24,677.80, lower by 30.60 or 0.12%.

Nifty ended Friday’s session with a marginal loss with cash market volumes on the NSE falling to Rs 1.08 lakh crore, said Deepak Jasani, Head of Retail Research at HDFC Securities. The near-term trend of Nifty remains positive, he said.

“Nifty on weekly charts gained the most since early June and formed a long bull candle with minor upper shadow. Having moved above the crucial hurdle of 24,500 there is a possibility of more upside in the coming week/s. The next upside targets to be watched are around 24,857-24,882 band and later 25,084 in the near term. Immediate support is at 24,351,” Jasani said.

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

Rupak De, LKP SecuritiesThe Nifty continues to sustain above the breakout from an inverse head-and-shoulders pattern, indicating underlying market strength. In such conditions, adopting a buy-on-dips strategy seems prudent, especially with the potential for an upward move toward 25,500 in the short term. However, minor pullbacks following a sharp rally are possible, further emphasizing the effectiveness of buying on dips to capitalize on this trend.

Om Mehra, Technical Analyst, SAMCO Securities

Despite oscillating within a narrow range on Friday, the Nifty index is holding steady above the crucial 24,650 support level. The primary trend remains positive, as Nifty trades near the upper band of the Donchian Channel, which is trending higher—a signal of potential bullish momentum. Additionally, India’s VIX remains subdued, hovering below the 15 mark, suggesting a contraction in volatility and reduced fear in the market. The outlook remains optimistic as long as 24,500 holds on a closing basis. A decisive move above 24,700 could open doors for further upside, while failure to sustain could lead to consolidation.

Hrishikesh Yedve, Asit C. Mehta Investment Intermediates

Technically, on the daily chart, the index took a pause after a strong rally and formed a small red candle, while on the weekly chart, it formed a strong bullish candle, indicating strength. Additionally, the index has witnessed a breakout from an inverted head and shoulders pattern. As per this breakout, the index could test 25,000-25,200 levels in the medium term. Immediate support is placed near 24,550, followed by 24,300. As long as the Nifty stays above 24,300, traders should adopt a buy on dips strategy.Also Read: LG Electronics India files for IPO to sell 10.18 crore shares(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)