Tech view: Nifty forms bullish candle; corrective rally ahead




Experts warned traders not to get carried away by the bounce and maintain a stop loss below 9,968 level for an initial target of 10,088. NEW DELHI: The Nifty50 reclaimed the 10,000 mark on a closing basis on Monday, for the first time since August 7, 2017. In the process, the index formed a bullish candle on the daily chart.

While supports shifted higher from 9,900 level to the 9,950-9,980 range, experts believe the 50-pack index may face resistance at 10,060 level. Tread with caution, they said.

“The Nifty50 appears to have witnessed a breakout, but overlapping price behaviour from the low of 9,685 along with a negative divergence on the momentum oscillator is pointing towards a corrective upward rally. Traders need to remain cautiously optimistic. A real thrust to the Nifty50 may come if it closes above the 10,060 level in the next session,” said Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in.

If this happens, the Nifty50 should retest the recent high of 10,137, Mohammad said.

The index opened higher on Monday and hit a high and low of 10,028 and 9,668, before closing the day at 10,006, up 71.25 points, or 0.72 per cent. This was the third day of consecutive gains for the NSE barometer.

Chandan Taparia of Motilal Oswal Securities said the index surpassed its immediate hurdle at 9,980 on Monday.

“It registered the highest daily close in last 23 sessions, forming a bullish candle on the daily chart. Supports are shifting higher gradually. The index needs to hold above 9,980, before seeing a bounce towards 10,050, and later towards 10,080,” he said.

Taparia expects the index to find downside support at 9,928 and 9,880 levels.

Mohammad warned traders not to get carried away by the bounce and maintain a stop loss below 9,968 level for an initial target of 10,088.




Leave a Reply