Tech View: No relief in sight for the bulls, as Nifty still looks weak

NEW DELHI: Nifty50 recovered from Saturday's selloff on Monday and closed above the 11,700 level. The index formed a small bullish candle on the daily chart.

But analysts were not convinced about the rebound. They see immediate resistance for the index at 11,750 level and advised a ‘sell on rise’ strategy.

“We cannot say with certainty that the bulls can breathe a sigh of relief, as multiple overhead resistances could bring back the bears on top,” said Aditya Agarwala of YES Securities.


Agarwala said the 11,650-11,600 range, which coincides with the 200-EMA and 161.8 per cent Fibonacci extension level, can offer immediate resistance, below which the bears can get active once again.

“On Monday, the selling pressure got absorbed near the 11,600 level, but that could not trigger any meaningful bounce for the index. The larger structure showed downside risks. The 11,614 level will act as immediate support for Nifty. Traders are advised to avoid aggressive long positions,” said Gaurav Ratnaparkhi of Sharekhan.

For the day, the index closed at 11,724, up 62.20 points or 0.53 per cent.

The index is still hovering around the 200-day EMA and the previous swing high of 11,695, said Chandan Taparia of Motilal Oswal Financial Services.

Traders should not remain aggressive on the long side, he said.

That said, a move above the 11,750 level could lead to some pullback towards the 11,800-11,850 range, said Mehul Kothari of IndiaNivesh Securities. Taparia seconded the view. He saw potential for an upside towards 11,830-11,900 levels, if the 11,750 level is breached.