Tech View: Nifty50 forms a bullish candle; risk takers can buy the dips

NEW DELHI: Nifty50 on Tuesday made higher highs for the 14th straight session and formed a bullish candle on the daily chart. Analysts said Nifty’s positive momentum can continue and it can look to take out the 14,750 level soon. They see support for the index in the 14,300-14,430 zone.

“As long as Nifty sustains above 14,432 level, the momentum can stay strong. In that scenario, the bulls can extend their upward journey into the 14,690-750 zone. Contrary to this, one can expect a pause accompanied by an intraday correction if the index slips below the 14,432 level. Except overbought readings on the momentum oscillators, no other technical parameter is hinting at weakness in the ongoing market march. Traders with high risk appetite can consider buying into intraday dips,” said Mazhar Mohammad of Chartviewindia.in.

For the day, Nifty closed at 14,563 level, up 78.70 points or 0.54 per cent. The 14-day RSI stood at 80.94. In a trending market, an RSI value above 80 is considered overbought condition.

Even though Nifty is placed at the high, there is no indication of any trend reversal in the market, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

“The symmetrical pattern of upmove/time consumption in last 16-18 sessions before a day’s sharp weakness remains intact. After drop of the last one day on December 21, 15 sessions have already been consumed. Hence, 2-3 sessions from here on are going to be crucial and one can expect sharp profit booking from the highs,” Shetti said.

Independent market analyst Manish Shah said there is no sign of change in trend on the lower time frame chart. “Nifty continues to show a pattern of uptrend on the lower timeframe charts. The market can remain in a trend far longer than one may feel it is possible. In an uptrend, one should have a policy of holding on to long trades. Even if there is a corrective decline, it may last only a couple of days. As long as Nifty holds above 14,350 level, there is no reason to feel that the market has changed direction. With each passing day, the possibility of Nifty hitting the 15,000 level seems highly probable,” Shah said.

Check out the candlestick formations in the latest trading sessions

Ashis Biswas, Head of Technical Research at CapitalVia Global Research, expects Nifty to move in the 14,500-800 range in the coming days.

“Nifty has to hold above 14,400 level to witness a fresh move towards 14,750 and then 15,000 levels. Downside supports exist at 14,300 and 14,200 levels,” said Chandan Taparia of Motilal Oswal Securities.