Tech View: Nifty forms indecisive candle, has key support at 8,244

NEW DELHI: Nifty50 on Tuesday jumped nearly 4 per cent, but ended up forming an indecisive candle on the daily chart with a long lower wick. During the session, the index stretched higher to retrace 50 per cent of the recent fall, but levels around 8,700 acted as key resistance during the day.

Analysts said the NSE barometer needs to respect the support of 8,244, else the downside may resume. They see 9,660 as an immediate resistance level.

“The intraday chart reveals that the rise is a corrective structure and is likely to be followed by the next leg down. Thus, the bounce is an opportunity to initiate fresh short positions. The swing low of 8,244 is the initial level to watch out for,” said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan.


For the day, the index closed at 8,597.75, up 316.65 points or 3.82 per cent.

The current leg of fall from the highs of 9,038-8,244 looks like a right shoulder of an Inverted Head & Shoulders formation, which is a bullish reversal pattern, said Mazhar Mohammad of Chartviewindia.in.

“The breakout for Nifty will be confirmed on a close above 8,660 level. Meanwhile, it is critical for the index to sustain above 8,244, as breach of this level can resume the downswing with targets placed in 8,100-7900 range,” Mohammad said.

Ruchit Jain of Angel Broking sees 8,240 as immediate support, followed by the 8,000 level. He sees resistance for the index in the 8,740-8,800 range.