Tech view: Nifty50 forms Hammer candle, may turn sideways for now

NEW DLEHI: The Nifty50 formed a Hammer candle on the daily chart on Friday, as the index recouped its losses to end on a high note in an otherwise poor week for the equities.

Analysts said the index might turn sideways with a positive bias for a couple of days before seeing any directional move.

On the weekly charts, Nifty formed a Bearish Engulfing pattern, said Mazhar Mohammad of Chartviewindia.in, who feels traders should adopt a neutral stance for now.


“Since the December 19 high of 10,985, Nifty50 appears to be forming a contracting structure with lower tops and lower lows. In the next couple of sessions, we can expect it to see a sideways move as long as the index sustains above 10,628. Upside, if any, will be capped at 10,700,” the expert said.

For the day, the index rose 55.10 points, or 0.52 per cent, to 10,727.

Nagaraj Shetti of HDFC Securities said Nifty has seen an alternative candle formation of red and green in the last few weeks. He sees the possibility of a small upside bounce during early to mid-part of next week, but says the 108,80-900 range will offer a strong resistance in the near term.

On the daily chart, the index formed lower highs and lows for the third session. “Nifty can negate the same by holding above the 107,50-10,777 range and witness a short-term bounce towards 10,850, while a hold below the same level could drag it towards its next crucial support in the 10,650-10,600 zone,” said Chandan Taparia of Motilal Oswal Securities.