Tech View: Nifty50 forms a bullish candle, but is still not out of the woods

NEW DELHI: Fag-end buying revived market fortunes, as NSE Nifty smartly recovered nearly 80 points from the day’s low to end on a positive note. In the process, the index formed a bullish candle on the daily scale on Wednesday.

For the day, the headline index closed 53.35 points higher at 11,910.15, after hitting an intraday high and low of 11,923.20 and 11,832.30, respectively.

Rohit Singre, Senior Technical Analyst at LKP Securities said, “The index reversed from its strong support zone of 11,850-11,800, hinting same levels will act as immediate support in the next session, while resistance is coming near 11,950-12,000 zone.”


The Relative Strength Indicator (RSI) stood neutral against the price, while daily momentum indicator MACD stayed in sell mode. The index hovered below its short-term 20-DMA, which stands at 11,981 during the session.

Nifty continued with its formation of lower highs and lower lows for the fourth straight session. Market analysts expect Dalal Street to continue consolidation given the current market scenario.

Amit Shah, Technical Research Analyst with Indiabulls Ventures said: “We continue with our near term view of a consolidation phase. Market breadth yet again remained on the weaker side. Support zone of 11,700 is likely to get tested on the downside, which may be a good time to play contra and go long on the index near the key important support zone.”

Milan Vaishnav, Consultant Technical Analyst at Gemstone Equity Research & Advisory Services advised not to chase upmoves.

“Protect profit with each upside that the market offers. A stock-specific and cautious view is advised for the next session,” Vaishnav said.

Mazhar Mohammad, Chief Strategist–Technical Research & Trading Advisory, ChartviewIndia said, “It is too early to conclude that short term bottom is in place.”