Tech view: Hammer on Nifty chart shows bulls are trying to fight back
NEW DELHI: The Nifty50 ended August F&O series flat at 11,676 on Thursday. The index formed a Hammer candle on the daily chart, suggesting that the bulls managed to fight back and recovered some ground in the end.
This was the second day of lower-high lower-low formations for the index, warranting caution. A fall below the 11,590-20 range on a closing basis may confirm a short-term trend reversal, analysts said.
For the day, the index fell 15.10 points, or 0.13 per cent, for the day. For the August F&O series, it was up 4.60 per cent.
A trade below 11,590 will trigger a breakdown from a rising channel, which can drag Nifty lower to 11,530 and 11,500 levels, said Aditya Agarwala of YES Securities. He believes a trade above 11,700 can help Nifty50 resume the uptrend towards the 11,760-11,850, range.
The index formed a Hammer candle on the daily scale, which indicated that the decline got bought into. But the immediate hurdle of 11,777 is restricting its momentum, said Chandan Taparia of Motilal Oswal Securities.
A decisive hold above 11,666 can extend the index towards 11,777 while a drift below 11,620 can change its short-term price behaviour, he said.
The underlying short-term trend of Nifty is slightly weak, but the weakness seen in the last couple of sessions weakness has not damaged the uptrend status of the market so far, said Nagaraj Shetti of HDFC Securities.
Sell signals have been generated on multiple technical parameters and should the index close below 11,615 on Friday, a short-term trend reversal will get confirmed, said Mazhar Mohammad of Chartviewindia.in.
Traders will be better off by maintaining neutral stance till some initial signs of strength get visible, he said.