Nifty50 somehow pushed its winning run to the eighth straight day on Thursday. The index made a similar high as Wednesday’s, as the bulls looked tired at highs. Analysts are cautious
The ‘RSI Smoothed’ oscillator has given a negative divergence on the lower time frame chart in the overbought zone, which is the first sign of caution, said Ruchit Jain, Lead Research, 5paisa.com.
“Traders should wait for crucial support to get breached for taking any contra trades. The immediate supports for Nifty50 are now placed around 17,850 and 17,770 and a close below this would be a sign of reversal,” he said.
The index closed the day at 17,956.50, up 12.25 points or 0.07 per cent. The NSE barometer formed a small bullish candle on the daily chart.
Mazhar Mohammad of Chartviewindia.in said the weakness is not panning out, as clear-cut sell signals are missing on short-term charts despite being in extremely overbought zones.
“It needs to sustain above 17,833 to retain a positive stance as the breach of said level can trigger more profit booking with initial targets present around 17,750 levels. If Nifty50 manages to get past 17,965, it can head towards 18,100,” he said.
Some analysts, however, see the index touching the 18,000 level soon.
“For the last couple of sessions, the index is witnessing a brief consolidation near 78.6 per cent retracement of the entire October 2021 to June 2022 decline. This is a healthy sign for the overall uptrend.
The index is poised to test the crucial psychological mark of 18,000, which holds the key to a further course of action. The near-term support zone inches upwards to 17,850-17,800,” said Gaurav Ratnaparkhi of Sharekhan.
Nifty Bank
Rupak De, Senior Technical Analyst,
, said the momentum oscillator RSI is in a bullish crossover, rising deep into the overbought zone. The trend for the banking index is likely to remain strong in the short term, De said. “On the higher end, resistance is visible at 40,100. On the lower end, support is visible at 39,250/39,000,” De said.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
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