INSUBCONTINENT EXCLUSIVE:
NEW DELHI: The Nifty50 reclaimed the 10,700 level on Friday to settle above its 50-day moving average
The index formed a large bullish candle on the daily chart, similar to a ‘Long White Day’ and would face resistance at other key
short-term moving averages in the 10,730-10,750 range.
On the face of it, Friday’s rally seemed to have instilled confidence among the
bulls.
As per daily timeframe charts, the formation of a long bull candle after a gap-up opening indicates the possibility of some more
upward move in the market in the near term, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
“Nifty has formed a bear
candle along with a long lower shadow on the weekly timeframe chart, which indicates negative bias
At the same time, the formation of a long lower shadow signals emergence of buying interest at low levels
All of this suggests the near-term trend would remain downward and the current bounce is unlikely to sustain for long,” the expert
said.
For the day, Nifty50 surged 125.20 points, or 1.18 per cent, to 10,714
The index went on to erase around 62 per cent of the losses that it had suffered in the previous two sessions.
If Nifty continues to show
similar strength in the next session, then the possibility of bottom formation at Thursday’s low of 10,557 will be much higher
The same can be confirmed with a close above 10,785 by Monday, said Mazhar Mohammad of Chartviewindia.in.
“However, as Nifty and Bank
Nifty futures trade at a discount to spot prices, they are either suggesting lack of conviction about sustainability of this rally or
building up of short positions at higher levels
At this juncture, traders will be better off waiting for one more session to get a confirmation of strength,” the expert said.
Chandan
Taparia of Motilal Oswal Securities said as long as Nifty50 holds above 10,660, it can extend its gains towards 10,770 and 10,835 levels
On the downside, supports are seen at 10,660 and 10,620 levels, he said.
