NEW DELHI: Nifty50 took a breather on Tuesday and formed a Long Legged Doji on the daily chart, suggesting indecisiveness among traders. Analysts said the uptrend remains intact even as they believe some sideways move is a possibility after the recent rally. A support for the index is seen at 16,400 while resistance is likely for the index at 16,700 level.
The price action for the last couple of sessions is developing as a Flag pattern on the hourly chart, said Gaurav Ratnaparkhi of Sharekhan, who believes the sideways action can continue in the range of 16,500-16,700, before the index prepares for the next leg up.
“On the daily chart, the index had crossed a falling trendline on May 30 and it has retested the same on Thursday. The overall outlook continues to remain positive from a short term perspective with the short term target at 17,000. A reversal for the bullish stance can be placed below 16,400 on a closing basis,” he said.
For the day, the index closed at 16,584.55, down 76.85 points or 0.46 per cent.
The present consolidation movement or minor downward correction could continue for the next 1-2 sessions that is likely to prepare a base for another round of sharp upmove in Nifty50 for the near term, said Nagaraj Shetti of
Securities.
The next upside levels to be watched are around 16,900-17,000, Shetti said.
Mazhar Mohammad of Chartviewindia.in said Tuesday’s pattern also looked like an Inside Bar kind as the trading range was confined between Monday’s 16,695 and 16,506.
“The late sell-off in the last 30 minutes of the session can be a cause of concern. In case, if the Nifty50 slips below 16,500 in the next session, it can extend the weakness towards 16,370 to bridge the bearish gap present in 16,506 and 16,370 levels. The strength can be expected to resume if the bulls manage to push the index above 16,690 levels,” he said.
Nifty Bank
Chandan
of Securities said that the index has closed near its 50-EMA, with losses of around 340 points. The index, Tapari said, made a Bearish candle on the daily scale and negated its higher highs of the last four sessions.
“Now it has to hold above 35,500 zone for an up move towards 35,800 and 36,100 zone while on the downside support exists at 35,250 and 35,000 zones,” Taparia 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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