Nifty on Friday ended 156 points higher to form a candle resembling bearish shooting star on the daily chart.

The short-term uptrend status of Nifty remains intact. But, the overall chart pattern suggests a possibility of high volatility at the new highs. Any attempt of upmove from here could encounter strong resistance around 22,100 -22,200 levels and that could possibly result in short-term weakness from the highs. Immediate support is at 21,700 levels, said Nagaraj Shetti of HDFC Securities.

On the derivative front, 22,200CE added the highest open interest.

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

Rupak De, Senior Technical Analyst, LKP Securities

Nifty surpassed the 22,000 mark during the first half of the Friday session but subsequently formed a double top on the hourly chart. Confirmation of a bullish trend resumption would only occur with a decisive breakout above the double-top, which is currently identified around 22,125. Conversely, a break below the support level at 21,500 could indicate a bearish momentum. In the scenario of a breakout above 22,150, Nifty may experience upward momentum, potentially reaching levels such as 22,500 and beyond.

Jatin Gedia, Technical Research Analyst at Sharekhan by BNP Paribas

The daily and hourly momentum indicators provide a divergent signal and prices are stuck within a range. Bollinger bands are contracting indicating range-bound price action. Thus, parameters suggest that the consolidation is likely to continue. Stock-specific action and sector rotation are likely to continue during this period of consolidation. Key support levels are 21,660 – 21,600 while the immediate hurdle zone is placed at 22,100 – 22,150.

Ajit Mishra, SVP – Technical Research, Religare Broking

Nifty has retested its record high after consolidating for two weeks but, we feel, it is early to assume that we are set for the next leg of the up move. It needs sustainability above 22,150 to march towards 22,500+. Besides, consistency in the participation from the banking majors is also critical for a steady trend else the range-bound trend would continue. Traders should focus more on stock selection in the present scenario and maintain positions on both sides.(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)

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