NEW DELHI: The Nifty50 staged a strong rebound on Friday, but could not reclaim the 10,500 level. The index fo rmed a Morning Star pattern on the daily chart, which would be confirmed only if the index shows followup buying next week.
In such a case, Thursdays intraday high of 10,138 level could emerge as a short-term bottom.
“The index formed a bullish candle with a Morning Star pattern, which indicated that a small follow-up could confirm a short-term reversal,” said Chandan Taparia of Motilal Oswal Securities
On the weekly scale, the index formed a Hammer candle on the weekly scale, with a positive close after five weeks of correction.
“It has also taken support at the lower band of the rising channel on the weekly scale by connecting its major swing lows of 6,825, 7,893 and 10,200 levels. The index needs to hold above multiple hurdles of 10,450-10,480 to witness an upward move towards 10,600 and 10,650,” Taparia said.
Any minor dip in the next session could be an opportunity to create fresh longs, said Mazhar Mohammad of Chartviewindia.in.
“While the immediate hurdle stands around the 10,547 level, with strong price action and almost a confirmation of a short-term bottom in place, this level may not be a difficult task for the bulls to clear. Hence, this pullback should get extended to initially test its 200-DMA, which is placed around the 10,779 mark. However, as the market may remain vulnerable to external factors, a stop loss below 10,300 is advisable for short-term traders,” the expert said.
Niftys short-term trend is upward and the next crucial overhead resistance to watch next week is in the 10,580-600 zone, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
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ET Markets
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