Stock Market

Tech View: Nifty's long bullish candle shows short-term bottom in place

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NEW DELHI: In a day of crazy swings, Nifty50 on Friday settled with a solid 4.5 per cent gain after hitting the 10 per cent lower circuit limit earlier in the day.

The index formed a ‘super’ Long Bullish candle on the daily chart as it swung in a massive 1,600-point range.

Analysts said the index might have formed a near-term bottom. “Nifty has to continue to hold above 9,400 to witness a bounceback towards 10,333 and 10,650 levels.

Key support exists at 9,400 and 9,100 levels.

Traders are advised to stay light on positions as volatility is at multi-year high across the globe,” said Chandan Taparia of Motilal Oswal Securities expert said. For the day, the index closed at 10,023, up 433 points or 4.52 per cent.

Momentum oscillator 14-day RSI has recovered from the deep oversold territory.

Analysts said that the 10,200 and 10,300 levels have in the past acted as key resistance and can continue to do so. Jimeet Modi, Founder - CEO at SAMCO Securities, said the index testing its 100-month EMA on the monthly chart was something traders have not seen since the 2008 bottom. This was an extreme over-reaction clouded by coronavirus and global equity selloff.

An increase in volume confirms that panic selling is almost over.

This forms a short-term bottom, at least for some time, and traders can exploit this opportunity for a sizable up-move by buying on dips,” Modi said.

Gaurav Ratnaparkhi of Sharekhan expects Nifty to get into the consolidation mode.

He expects the index to move in a broad range between 10,000 and 9000 levels, he said.




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