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Tech View: Nifty forms a bullish candle, may create a double top

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NEW DELHI: Nifty50 resumed its uptrend on Tuesday after a brief halt on Monday.

The index formed a bullish candle on the daily chart and negated the negative pattern formed in the previous session.

Analysts said if the index manages to trade above 12,070, it could attract more buying interest. Aditya Agarwala of YES Securities said a sustained trade may extend the ongoing rally in the index towards the 12,250-12,350 zone.

However, he expects the ongoing rally to pause temporarily, if Nifty falls below 12,100. Nagaraj Shetti of HDFC Securities said Nifty50’s short-term outlook looks positive.

“There is a chance of a double top formation, if Nifty fails to sustain the current high.

The negative divergence pattern on the daily RSI seems to have started to develop at the new high.

But we need a confirmation,” he said. For the day, the index closed at 12,165, up 111 points or 0.92 per cent.

This was the fourth consecutive session when the index formed a higher high-low sequence. Chandan Taparia of Motilal Oswal Securities said Nifty has a high probability of hitting the 12,250-12,300 zone, if it stays above the 12,070 level in the near term. “The market has events like GST Council meeting and Trump impeachment vote lined up ahead, which can materially alter market direction.

It looks prudent for traders to book profit on long positions, as the market heads beyond the 12,200 level, whereas fresh signs of weakness may emerge on any close below 12,070 level,” said Mazhar Mohammad of Chartviewindia.in.




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