Tech view: Nifty forms Inside Bar, however trade setup still favours bears

INSUBCONTINENT EXCLUSIVE:
NEW DELHI: The Nifty50 settled just shy of the 10,700 mark on Tuesday
The index formed an Inside Bar on the daily chart and closed above its 50-day moving average. Analysts believe one should not read too much
into Tuesday’s gains and that a sustained breach above 10,755 is required for the bulls to be on top
"A sustained trade above 10,755, which happens to be the 61.8 per cent Fibonacci retracement level, can extend the upward move to 10,830
and 10,875 levels
However, a failure to cross this resistance can lead to choppy trading and drag Nifty lower to 10,650 and 10,560 levels,” said Aditya
Agarwala, Technical Analyst, YES Securities
For the day, the index rose 42.60 points, or 0.40 per cent, to 10,699
The index recently made a swing high of 10,736, a crucial hurdle, on a closing basis. "On the flip side, the breakout level for the 'Inside
bar' is at 10,604
The overall setup suggests Tuesday's move was nothing but a minor bounce and the overall outlook continues to be in favour of the bears
In terms of the wave structure, we are witnessing subdivisions on the way down
By the time the subdivisions resolve themselves, the index can tumble to test the May low of 10,417 with potential to slide to lower
levels,” said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan. Mazhar Mohammad of Chartviewindia.in believes technical
oscillators on the lower time frame charts are slowly shaping up in a positive fashion, perhaps pointing towards stability and a short-term
upward move over the next couple of sessions. He advised traders to selectively look for opportunities with a stop loss below 10,600 on a
closing basis. As per the pattern of alternative candle formation, there is a possibility of weakness in Wednesday's session, said Nagaraj
Shetti of HDFC Securities, adding that the underlying short-term trend has turned slightly positive. Chandan Taparia of Motilal Oswal
Securities said the index needs to hold above 10,660 for an upward move towards 10,770 level
On the downside, supports are seen at 10,600 and 10,550 levels, he said