Nifty up for 13th day, selling getting absorbed. What's next?

Nifty50 on Monday made fresh record high and took its winning run to the thirteenth straight session. The NSE barometer formed a small bearish pattern on the daily chart. There are no signs of fatigue as of now, said analysts, as they cited formation of higher highs from six sessions now. Nifty50 can breach the 25,500 level in the short term, they said.

For the day, the 50-pack index closed at 25,278.70, up 42.80 points or 0.17 per cent. Nifty50 has made positive closes since it settled at 24,139 on August 13. 

"Nifty50 formed a small bodied Bearish candle on the daily timeframe with longer lower shadow, indicating absorption at dips," said Chandan Taparia of MOFSL. The index continued to hold above 25,200 for an up move towards 25400 then 25500 levels while support is seen at 251,00 then 25,000 zones.

The index may continue to ride the upmove, said  Jatin Gedia – Technical Research Analyst at Sharekhan. On the upside, Gedia expects Nifty50 to target the level of 25,500. On the downside, a crucial support base is placed at 25,210-25,120 is the crucial where the key hourly moving averages are placed, he said. Gedia advised traders to ride this upmove with the trailing stoploss mechanism.

Hrishikesh Yedve, AVP Technical and Derivatives Research at Asit C. Mehta Investment Interrmediates said the index failed top sustain a gap-up start. The index formed a bearish candle but is still holding well above the breakout of a rounding bottom pattern indicating strength, he said..

On the downside, the 9-Day Exponential Moving Average (DEMA), positioned near 25,022, will act as immediate support for the Nifty50 in the short term, he said adding that "as long as the index remains above 25,000, a 'Buy on dips' strategy should be adopted. On the upside, the index could test levels of 25,500-25,600 in the short term," Yedve said. 

The short-term texture of the market is still in to the positive side, said Shrikant Chouhan, Head of Equity Research at Kotak Securities. On the intraday chart, the market is still holding higher high and higher low series formation, which supports further uptrend from the current levels.

"We are of the view that, 25,200/82,350 would act as a sacrosanct support zone for the day traders. As long as it is trading above the same, the bullish sentiment is likely to continue. On the higher side, it could move up till 25,400-25,425/82,800-83,000," it said.

On the F&O side, Rupak De, Senior Technical Analyst at LKP Securities said heavy call writing was observed at the 25,300-strike, and overall, call writers significantly outnumbered put writers throughout the day. In the near term, the trend might remain sideways to negative, as long as it stays below 25,300, he said. 

"On the lower end, however, the correction may be limited to 25,000, where significant put writing has been observed." he said.