Tech view: Nifty forms Hammer candle, but direction uncertain

NEW DELHI: The Nifty50 staged a recovery in late trade to end Monday’s session with minor losses. With no upper wick, the index ended up forming a ‘Hammer’ candle on the daily chart, suggesting that every selloff during the session got bought into. The index needs to hold above 10,450 to continue the ongoing positive momentum, say analysts.

“The current chart pattern is signalling a trended upmove in the underlying and downward corrections in between have not damaged the uptrend status so far,” Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

For the day, the index fell 24.80 points, or 0.24 per cent, to 10,528. It hit a low of 10,477 during the session, before recoveries some of the lost ground.


"The index needs to hold above 10,450 to extend its upward move towards the 10,650-10,750 zone, while on the downside, multiple supports are seen at 10,450 and 10,380 levels," said Chandan Taparia of Motilal Oswal Securities.

Mazhar Mohammad of Chartviewindia.in advised traders to remain cautious on the long side of trades, as a negative close in the next session may trigger a short-term correction that may get accentuated further on a close below 10,440.

“Contrary to this, a close above 10,600 may initially extend this pullback towards the 10,710 level,” he said.