Tech View: No Nifty follow-up buying after gap-up start disappointing; 15,800 a key support
Nifty50 on Monday rose for the third straight session but closed below its opening level, thus forming a bearish candle on the daily chart. Analysts said failure to see a follow-up buying post a gap-down start was disappointing. The index needs to hold above the 15,800 level to hold for the momentum to stay strong, they said.
If the index slips below 15,800, the weakness may expand towards 15,600 level, said Mazhar Mohammed of Chartviewindia.in.
“To regain some strength, the bulls need a close at least above its 20-day SMA, whose value is placed around 15,984 levels. In such a scenario strength can further expand towards the 16,172 level. For the time being, short-term traders are advised to remain neutral on the long side, whereas an intraday shorting can be considered, if the Nifty slips below 15,800 levels, for a modest target of 15,690,” Mohammed said.
For the day, the index closed at 15,832.05, 132.80 points or 0.85 per cent.
“The crucial overhead resistance of 15,800 levels (previous swing lows, as per the concept of change in polarity) has been taken out on the upside. But, the lack of further upside post upside breakout and a formation of range bound action subsequently after the opening could dampen the effort of bulls to sustain the highs,” said Nagaraj Shetti, Technical Research Analyst,
Securities.
Sameet Chavan of Angel One advised traders to wait for a decisive breakout to create aggressive bets.
“It was really disappointing to see the market failing to capitalize on the head start they got today morning. Ideally, a close beyond 15,900-16,000 would have created a state of confusion among the bears. But it seems they managed to hold their nerves and did not let Nifty surpass the wall,” Chavan said.
Though the underlying trend on the lower time frame is up, we could see a slow laboured price move towards the end of June expiry, said Independent analyst Manish Shah.
Bank Nifty
Shah said Bank Nifty is breaking out of an inverse Head-and-Shoulder pattern, a bullish trend reversal pattern.
“This suggests a rally to 34,800-34,900 over the next several days. MACD has moved into a buy mode, and the PDI has crossed above MDI. Bank Nifty could be seeing a steady rise over the next few days. The support is at 33,600-33,650, and as long as Bank Nifty holds above this, the short-term bias is bullish,” Shah 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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