NEW DELHI: The Nifty50 rebounded smartly on Monday to snap a three-day losing streak. The index formed a bullish candle with a long wick, suggesting buying at lower levels.
The index has been seeing buying at lower levels whenever it has drops below the 10,900 mark. On Monday, it bounced back after testing a key support at 10,850 mark. The index finally settled above 11,000 at 11,008, up 77.85 points, or 0.71 per cent.
“We observe the formation of a positive divergence in the RSI, which indicated some more upside momentum for the market in next 1-2 sessions,” said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
The market will remain closed on Tuesday on account of Gandhi Jayanti.
During the day, the index took support at the 50% Fibonacci retracement level placed at 10,850, suggesting strong support in the 10,800-10,850 range, said Aditya Agarwala of YES Securities.
“Moreover, the RSI has turned upward from the extreme oversold levels after forming a positive divergence on the shorter timeframe charts, which indicated room for additional upside in the coming sessions,” he said.
Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in, said if the index sustains above 10,900 on a closing basis, a multi-day pullback rally cant be ruled out. “For the time being, the upside looks capped in the 11,145-11,170 zone. Traders are advised to go long in the next session by making use of the initial dip, if any, in the first 30 minutes of trading with a closing stop below 10,900,” he said.
Chandan Taparia of Motilal Oswal Securities said the index has negated the formation of lower highs in last three sessions and now holds above the 11,000 mark, which may bring support-based buying and take Nifty towards 11,080.
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