Tech View: Nifty could be in overbought zone after scaling new peak. What traders should do next week

By ending 89 points higher after scaling yet another record high level, Nifty on Friday formed a small positive candle with minor upper shadow. On both daily and weekly charts, the index formed a breakout continuation formation, which is indicating that the uptrend wave is likely to continue in the near future.

The short-term trend of Nifty continues to be positive but given the recent run-up, traders should be prepared for correction. The next upside target to be watched at 20450 levels, which is 38.2% Fibonacci extension, taken from March bottom-July top-Aug bottom. Immediate supports to be watched at 20050, said Nagaraj Shetti of HDFC Securities.