Markets

Tech view: Nifty50 forms bullish candle & a minor double bottom

NEW DELHI: The Nifty50 fell a tad short of reclaiming the 10,700 level in intraday trade on Wednesday to eventually close the session above its key resistance level at 10,680. The index formed a bullish candle on the daily chart and may now attempt to move towards the 10,750-80 range.

A formation of minor double bottom-type pattern was observed, which could open the doors for further upside in the short term, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

For the day, Nifty rose 91.50 points, or 0.86 per cent, to close at 10,684. On the upside, the next level to watch is around 10,760, Shetti said.

This price action has formed a sizable bullish candle and the buying momentum was seen between 50-day and 100-day SMAs. “From the current level, we expect Nifty to retest the previous supply zone between 10,750 and 10,780 levels,” said Rajesh Palviya, Head Technical & Derivatives Analyst at Axis Securities.

Chandan Taparia of Motilal Oswal Securities sees the next hurdle at 10,765 and downside supports at 10,620 and 10,550.

A robust bull candle on the Nifty50 chart clearly suggests that the index made an attempt to start a fresh leg of upswing from the recent low of 10,550, which should logically take it beyond 10,770 level, said Mazhar Mohammad of Chartviewindia.in.

“Albeit the advance-decline ratio is strong, tepid participation from bank stocks post RBI monetary policy accompanied by lack of 'buy' signals any of the technical oscillators on the lower time frame charts shall be a cause for concern going forward,” Mohammad said.

A strong close beyond 10,770 can confirm that the bottom is in place around the recent low of 10,550, but the optimism may fade if the indices close below 10,587, the expert said.

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