Chandan Taparia of Motilal Oswal Securities said the index is holding above the 50-day EMA
NEW DELHI: Nifty climbed for the fifth straight session on Tuesday and formed a bullish candle on the daily chart. The 50-pack has been forming higher highs and lows for some time, suggesting that supports have shifted higher. The index needs to take out the 10,000 level soon, else profit booking may set in, analysts said.
"A sustainable move above the 10,000 mark may push the market towards the next upside hurdle of 10,500 in next 1-2 weeks. Inability to move above this level may trigger a downward correction, with the immediate support placed at 9,865 level," said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
Among key daily strength indicators, the RSI has been sustaining above the 50 mark, signalling rising strength, whereas momentum indicator Stochastic has flattened out in the overbought zone, indicating a slowdown in the rising momentum, said Rajesh Palviya, Axis Securities.
This analyst believes Nifty may scale the 10,100-10,200 region soon, while intraday support stands at 9,900 level.
For the day, Nifty closed at 9,979, up 152 points or 1.56 per cent.
"Nifty50 has ventured into the hurdle zone at 9,970-10,000, which is a crucial area to watch out for. Structurally, the index is trading near a make-or-break zone. A failure near these hurdles will result in a larger decline in the next leg. The hourly charts showed loss of momentum in Nifty on its way up, which can get reflected in price action in the coming sessions. On the downside, the 9,840-9,800 zone is a near-term support zone to keep tabs on,” said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan.
Chandan Taparia of Motilal Oswal Securities said the index is holding above the 50-day EMA and making a higher high-low sequence on both daily and weekly scales, which is a positive sign.
"At the current juncture, we are observing a breakout from the Cup and Handle pattern on the daily scale, which can add more momentum to the market. The resistance for Nifty is placed in the 10,200-10,300 zone, while support has inched higher to 9,820 level," Taparia said.
"Nifty opened on a positive note and buying momentum throughout the session led it to close near the day's high. The daily price action has a bullish candle forming higher high and low compared with the previous session, which indicated a positive bias. For the day, the bias remained positive. Nifty may scale the 10,100-10,200 zone from here on. On the downside, an intraday support is placed at 9,900 level,” he said.
