Tech view: Nifty forms bullish candle; next stop 11,600 level
On the downside, the 11,470-11,380 range should act a strong support zone.
By Amit Mudgill, ETMarkets.com |
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NEW DELHI: Nifty50 rallied over 1 per cent on Thursday on expiry of September series futures and options contracts. In the process, the index formed a bullish candle that negated Wednesday’s Bearish Belt Hold pattern.
Analysts said the bears could not push Nifty50 down enough to close the gap that the index had left on the daily chart recently.
“The lower end of the gap area at 11,381 acted as a key support for the index, which now seems to have triggered the next leg-up,” said Gaurav Ratnaparkhi of Sharekhan.
He said the hourly Bollinger Bands have contracted sharply. Once they start expanding, Nifty could see a strong rally.
For the day, the index closed 133 points, or 1.22 per cent, higher at 11,573.
"A sustained trade beyond the 11,600 level may trigger a breakout from a Bullish Flag pattern, which could propel the index higher to 11,690-11,770 levels. On the downside, the 11,470-11,380 range should act a strong support zone, which also happens to be the lower end of the Flag. The RSI has tested the 60-level, but turned higher, confirming strength,” said Aditya Agarwala of YES Securities.
Shrikant Chouhan of Kotak Securities feels the index can touch the 117,00-11,720 range and then 11,800 level. “This is where the market had left a bearish gap the day after the Union Budget. Any failure to do so may result in another round of weakness, where the market would trade below the 11,530 level and eventually retest the 11,400 level,” he said.
Analysts said the bears could not push Nifty50 down enough to close the gap that the index had left on the daily chart recently.
“The lower end of the gap area at 11,381 acted as a key support for the index, which now seems to have triggered the next leg-up,” said Gaurav Ratnaparkhi of Sharekhan.
He said the hourly Bollinger Bands have contracted sharply. Once they start expanding, Nifty could see a strong rally.
For the day, the index closed 133 points, or 1.22 per cent, higher at 11,573.
"A sustained trade beyond the 11,600 level may trigger a breakout from a Bullish Flag pattern, which could propel the index higher to 11,690-11,770 levels. On the downside, the 11,470-11,380 range should act a strong support zone, which also happens to be the lower end of the Flag. The RSI has tested the 60-level, but turned higher, confirming strength,” said Aditya Agarwala of YES Securities.
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Shrikant Chouhan of Kotak Securities feels the index can touch the 117,00-11,720 range and then 11,800 level. “This is where the market had left a bearish gap the day after the Union Budget. Any failure to do so may result in another round of weakness, where the market would trade below the 11,530 level and eventually retest the 11,400 level,” he said.
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