Tech View: Nifty’s weekly bullish engulfing candle signals strength; key resistance at 23,800. How to trade on Monday

The Nifty scale opened affirmative connected Friday, witnessed nett booking and yet settled the time connected a antagonistic enactment astatine the 23,560 level. The volatility index, India VIX, dropped by 3.45% to 13.69, indicating a alteration successful marketplace volatility.

Technically, Nifty formed a reddish candle connected the regular scale, signifying weakness. However, connected a play scale, the scale formed a greenish candle, confirming the bullish engulfing candlestick signifier formed past week. On the downside, the index's contiguous enactment is placed astir 23,430, wherever the short-term breakout constituent is located, portion the absorption of the downward-sloping inclination enactment is situated astatine 23,800. Considering the beardown play structure, buy-on-dips attack should beryllium adopted successful Nifty, said Hrishikesh Yedve of Asit C. Mehta Investment Interrmediates.

According to the unfastened involvement (OI) data, the highest OI connected the telephone broadside was observed astatine 23,800 and 23,600 onslaught prices, portion connected the enactment side, the highest OI was astatine 23,500 onslaught terms followed by 23,300.

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

Praveen Dwarakanath, Hedged.in

Nifty is reacting from the precocious portion of the Bollinger band, much similar a steadfast correction aft a tiny rally. The scale has enactment astatine the 23,400 level, from wherever it bounced during the day's fall. The scale formed a reddish doji candle, with a large little shadow, indicating a imaginable bounce from the contiguous level. The momentum indicators connected the regular standard constituent towards an upside from the existent level. Options writer's information for the monthly expiry showed accrued penning of puts astatine 23,600 and beneath levels, indicating mild bullishness successful the index.

Rupak De, LKP Securities

The Nifty remained volatile arsenic the RBI Governor announced the monetary policy. However, the volatility did not propulsion the scale beneath the 21 EMA connected the regular timeframe, signifying a affirmative short-term trend. The inclination is apt to stay affirmative arsenic l...