DELHI: The Nifty50 witnessed selling pressure from the word go on Wednesday, but managed to stage a smart comeback from sub-11,000 level.
The index eventually settled above the 11,050 mark, down just 14 points. In the process, the NSE barometer formed a bearish candle on the daily chart, but reversed its lower high, lower low formation .
A bearish candle with a lower shadow indicated buying support at lower levels, said Rajesh Palviya of Axis Securities.
“Nifty also formed higher highs and higher lows, which signalled a positive bias. For the second consecutive session, the index managed to sustain above its 100-day SMA at 11,035, which is a crucial support to watch out for,” the expert said.
For the day, the index fell 13.65 points, or 0.12 per cent, to close at 11,053. Technical indicator RSI bounced off the oversold zone of 30, suggesting more short covering rallies in the coming sessions, said Aditya Agarwala, Technical Analyst at YES Securities
“On the higher side, the 11,150 and 11,200 levels acted as a pressure area and the same is likely to continue going ahead. Traders are advised to stay on the short side of the trade for now. Positional traders can add short positions in a staggered manner for a target of 10,815 on the downside,” said Gaurav Ratnaparkhi of Sharekhan.
Nagaraj Shetti, Technical Research Analyst at HDFC Securities, said the recent bounce could be in line with the formation of new lower top of the sequence.
Nifty failing to move above the high of 11,100 could lead to sell on rise in the market, he said.
Mazhar Mohammad of Chartviewindia.in said the healthy opening tick of 11,145 did not last even a couple of minutes and Wednesdays looked like a day of consolidation.
“If the index sustains above Wednesdays low of 10,993 level, it will result in sideways trading with a positive bias. However, the 11,145-111,70 zone may act as a key resistance in the near term,” he said.
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