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NEW DELHI: Nifty50 on Friday formed a bullish candle on the daily chart with a slightly long lower wick, suggesting the selloff in intraday trade got bought into.
On a weekly basis, the index formed a Hammer-like pattern.
This formation, following an indecisive Doji in the previous week, suggested a loss of momentum.
For now, some consolidation looks on the cards.
The index has been finding support from its 20-day moving average, whose value is placed at around 11,560 level.
This made analysts believe the 11,580-550 range should act as support to the BSE barometer next week.
It will open up the way towards the swing high of 11,761, if the index manages to breach the 11,710 level on a closing basis, they said.
For the day, Nifty rose 46.75 points, or 0.40 per cent, to 11,643.
“The index has been consolidating in the 11,550-11,760 zone for last 11 sessions.
It needs to hold and sustain the lower limit if it were to retest the lifetime high of 11,761,” said Chandan Taparia of Motilal Oswal Securities
Mazhar Mohammad of Chartviewindia.in said the last two sessions of the week signalled some stability in the near term, which will be confirmed if Nifty closes above 11,710.
“The index may then turn sideways with a positive bias as it retests the life-time high.
The bulls needs to defend the 11,550 level to prevent damage,” he said.
Bollinger Bands on the hourly and daily timeframes are in the contraction mode, suggesting that the ongoing consolidation will continue for some more time before the index heads for a directional move, said Gaurav Ratnaparkhi of Sharekhan.
Nagaraj Shetti of HDFC Securities expects rangebound action going forward.
He does not rule out a minor correction before the index sees a sharp breakout on the upside from the all-time high point of 11,761.
