NEW DELHI: Nifty50 on Friday breached its 20-day simple moving average (SMA) and settled above the 16,350 level and formed a bullish candle on the daily chart and a ‘Hammer’ candle on the weekly chart, hinting at a reversal ahead. Analysts said a close above 16,400, the upper end of the ongoing consolidation range, can open up doors for an upside toward the 16,750 level. Downside supports are seen at 15,900 and 15,700 levels.
Mazhar Mohammad of Chartviewindia.in said that the daily candle resembled a Hanging Man, indicating indecision among market participants. But a key positive development on the technical charts is the fact that the Nifty50 closed above the 20-day simple moving average, he said.
“Interestingly, on weekly charts, the last three candles put together also point towards a sideways consolidation in the larger range of 16,400 and 15,700 levels but with a Hammer kind of formation for the current week. Hence, a close above 16,400 can further expand the upswing toward the 200-day exponential moving average, whose value is placed around
16,750 levels,” he said.
For the day, the index closed at 16,352.45, up 182.30 points or 1.13 per cent.
“The daily chart shows that the recent dip found support near 78.6 per cent retracement level, which was near 15900. Thereon the index witnessed fresh buying support. On the way up, it has crossed certain near term hurdles and is now once again approaching the crucial 16400 mark. The index has been facing resistance near 16,400 for the last three weeks. Once it is crossed on a closing basis, the index will be set to target 16,620 on the upside,” said Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan.
The short term texture of the market has changed to positive from negative, said Amol Athawale of Kotak Securities. For the trend following traders, 16,200 would be the key level to watch out. Above which, it could touch the level of 16,500-16,650,” Athawale said.
Nifty Bank
Chandan
of Securities said the index has closed above its 50-EMA on the daily frame. Comparative strength in the banking names from the last seven sessions kept the index flamboyant and it strengthened with the positive momentum, he said.
“It has retraced 38.20 per cent of the entire down leg from 38,765 to 33,000. It made a Bullish candle on daily and weekly frames and negated its lower highs of the last six weeks. Now it has to continue to hold above 35,500 for an up move towards 36,000 and 36,300 while on the downside support exists at 35,250 and 35,000,” Taparia said.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
For all the latest Business News Click Here
For the latest news and updates, follow us on Google News.
Denial of responsibility! NewsBit.us is an automatic aggregator around the global media. All the content are available free on Internet. We have just arranged it in one platform for educational purpose only. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, all materials to their authors. If you are the owner of the content and do not want us to publish your materials on our website, please contact us by email – [email protected]. The content will be deleted within 24 hours.
