Tech View: Nifty forms solid bullish candle ahead of exit polls; wild swings likely
During the session, the index broke above its brief resistance of the 11,300 level.
By Amit Mudgill, ETMarkets.com | Updated:
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NEW DELHI: Nifty50 rallied on Friday to form a solid bullish candle on the daily chart. The index, which was getting support at 100-day moving average for the last few sessions, broke out of a double Inside Bar pattern on Friday and now faces resistance at 11,467, which coincides with 50-DMA.
Technically, the index has potential to move towards 11,480-11,570 zone, but the wave structure suggests the minor pullback rally might be over.
Analysts say the exit polls on Sunday would play a key role in shaping up market direction. In case of disappointing exit polls outcome, the index may stare at sub-11,250 level, said analysts.
On Friday, the index rose 150.05 points, or 1.33 per cent, to 11,407.15.
During the session, the index broke above its brief resistance of 11,300. “The price action and buy triggers from a few near-term oscillators point to a rally towards 11,480-11,550,” said Arun Kumar of Reliance Securities.
Mazhar Mohammad of Chartviewindia.in said that Friday’s strong bullish candle, and Hammer pattern on the weekly charts suggest strength. The index should target 11,480-11,570 range under ‘normal’ conditions, he said.
“However, as the market is heading for a major event next week, Monday’s price action is certainly going to be influenced by exits poll. Any negative outcome may erase all the gains of May 17 by dragging the index below the 11,250 level,” Mazhar added.
In terms of the wave structure, the Nifty has formed third leg i.e. Wave C of a minor degree pullback.
“So as per the structure, it has done with the pullback required to attract the next round of selling. Hence the bounce is an opportunity to start building fresh short positions. The 11,400-11,450 zone is the likely area for the bears to take charge once again,” warned Gaurav Ratnaparkhi of Sharekhan.
Technically, the index has potential to move towards 11,480-11,570 zone, but the wave structure suggests the minor pullback rally might be over.
Analysts say the exit polls on Sunday would play a key role in shaping up market direction. In case of disappointing exit polls outcome, the index may stare at sub-11,250 level, said analysts.
On Friday, the index rose 150.05 points, or 1.33 per cent, to 11,407.15.
During the session, the index broke above its brief resistance of 11,300. “The price action and buy triggers from a few near-term oscillators point to a rally towards 11,480-11,550,” said Arun Kumar of Reliance Securities.
Mazhar Mohammad of Chartviewindia.in said that Friday’s strong bullish candle, and Hammer pattern on the weekly charts suggest strength. The index should target 11,480-11,570 range under ‘normal’ conditions, he said.
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“However, as the market is heading for a major event next week, Monday’s price action is certainly going to be influenced by exits poll. Any negative outcome may erase all the gains of May 17 by dragging the index below the 11,250 level,” Mazhar added.
In terms of the wave structure, the Nifty has formed third leg i.e. Wave C of a minor degree pullback.
“So as per the structure, it has done with the pullback required to attract the next round of selling. Hence the bounce is an opportunity to start building fresh short positions. The 11,400-11,450 zone is the likely area for the bears to take charge once again,” warned Gaurav Ratnaparkhi of Sharekhan.
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