NEW DELHI: The Nifty50 finally broke above the crucially important 10,650 level on a closing basis on Friday and opened up the way to the 10,710-10750 range as initial target.
The index formed a bullish candle on the daily chart. This was also the third week of gains for the index, which has made analysts foresee more upside in the near term.
“Near-term oscillators reverted to buy mode,” said Arun Kumar, Market Strategist at Reliance Securities. Considering the improved setup, the index may extend the rally towards its long-term average of 200-DMA at 10,750, he said.
For the day, the index gained 65.50 points, or 0.62 per cent, to 10,682. On the weekly timeframe chart, the index has formed a Hanging Man candle.
“We also observe an upside breakout attempt of the key overhead weekly resistance as per the concept of change in polarity at 10,650-70 levels. The overall trend of Nifty is positive, and one may expect further rise in the coming week. The next big upside target to be watched out for in the next couple of weeks is at 10,850 level,” said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
Mazhar Mohammad, Chief Strategist at Chartviewindia.in, said the 10,710 was the level where the index had made an interim top on October 17 from where the pullback rally was sold off, only to make new corrective swing low.
“Apart from this 200-day moving average is placed around 10,754 level. Hence, the entire 10,710-10,844 zone is looking like a massive supply zone, which the bulls need to absorb to sail smoothly,” he said.
The expert believes that a slip below the 10,630 level may drag the index initially to 10,440 level in the near term.