Tech View: Nifty50 forms a small bearish candle, gives mixed signals

NEW DELHI; The Nifty50 failed to capitalise on a firm start on Monday and barely managed to close higher for the fourth straight day. The index formed a small bearish candle on the daily chart, even as it formed higher highs and higher lows for the third straight session.

Near-term oscillators are sending out mixed signals. Only a strong rally above 10,920 can lift the index towards the 10,950-11,100 zone, as there isn’t enough strength visible on the charts so far.

For the day, the index edged 2.65 points, or 0.02 per cent, higher to 10,862. During the day, Nifty breached above the 78.6 per cent retracement level of 10,889 shortly before closing below it. “The index could correct in the near term, if it does not break above 10,985,” said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan.


Daily strength indicator RSI continued to remain flat in the overbought zone, indicating absence of strength. But momentum oscillator Stochastic continued to scale up, signalling that the upside momentum may continue in the near term, said Rajesh Palviya, Head of Technical & Derivatives Analyst at Axis Securities.

Subash Gangadharan of HDFC Securities felt the index has taken a breather after last week’s rally. Further upsides are likely once the immediate resistance of 10,923 is taken out, he said, adding that a crucial support exists at 10,853 level.