Tech View: Nifty forms bullish pattern, looks set to get past 9,000 level soon
NEW DELHI: The Nifty50 closed above its five-day exponential moving average on Wednesday and formed a Bullish Pattern on the daily chart. The rise indicated that it should take no time before the index tests the 9,000 level in the coming days, in case it manages to breach the strong resistance in the 8,950-8,970 range on a closing basis.
The 50-pack index has been ruling in the overnight territory as suggested by the 14-day relative strength (RSI) index.
Birendrakumar Singh, AVP for Technical Research at Systematix Shares & Stocks, noted that the stochastics too are placed in the overbought zone and are at negative divergence with the index’s daily price level.
But further upside looks possible.
“The formation of a Bullish Candle above the channel support trend line indicates that the Nifty50 would form a range between 8,867 and 8,982 and then a positive breakout up to 9,119 level is expected,” Singh said.
The Nifty50 reclaimed the 8,900 level at the opening bell. It hit the day’s high of 8,960 before seeing some selling pressure. The index eventually closed the day at 8,945, up 66.20 points or 0.75 per cent. Some experts are, however, sceptical about the strength of Wednesday’s rally.
Mazhar Mohammad, Chief Strategist for Technical Research & Trading Advisory at Chartviewindia.in, noted that the index made an intraday top in the very first hour of the session raising doubts that the index may see resistance at the 8,950 level, as the bulls faltered on multiple occasions from this level earlier.
“We maintain our bearish stance, as the weight of technical evidence is still favouring the bears. In case the bulls manage to conquer the 8,68 level on a closing basis by the end of this week, only then will the technical picture tilt in favour of the bulls by ushering in a short-term rally,” he said.
Chandan Taparia of Motilal Oswal Securities said respecting the rising support trend line was good, but multiple hurdles in the 8,982-9,000 zone may halt any fresh leg of the rally.
“The index has to hold above the 8,900 level in order to continue its upward move towards the 9,000 mark, while on the downside, multiple supports are seen at 8,888 and then 8,820 levels,” Taparia said.
The 50-pack index has been ruling in the overnight territory as suggested by the 14-day relative strength (RSI) index.
Birendrakumar Singh, AVP for Technical Research at Systematix Shares & Stocks, noted that the stochastics too are placed in the overbought zone and are at negative divergence with the index’s daily price level.
But further upside looks possible.
“The formation of a Bullish Candle above the channel support trend line indicates that the Nifty50 would form a range between 8,867 and 8,982 and then a positive breakout up to 9,119 level is expected,” Singh said.
The Nifty50 reclaimed the 8,900 level at the opening bell. It hit the day’s high of 8,960 before seeing some selling pressure. The index eventually closed the day at 8,945, up 66.20 points or 0.75 per cent. Some experts are, however, sceptical about the strength of Wednesday’s rally.
Mazhar Mohammad, Chief Strategist for Technical Research & Trading Advisory at Chartviewindia.in, noted that the index made an intraday top in the very first hour of the session raising doubts that the index may see resistance at the 8,950 level, as the bulls faltered on multiple occasions from this level earlier.
“We maintain our bearish stance, as the weight of technical evidence is still favouring the bears. In case the bulls manage to conquer the 8,68 level on a closing basis by the end of this week, only then will the technical picture tilt in favour of the bulls by ushering in a short-term rally,” he said.
Chandan Taparia of Motilal Oswal Securities said respecting the rising support trend line was good, but multiple hurdles in the 8,982-9,000 zone may halt any fresh leg of the rally.
“The index has to hold above the 8,900 level in order to continue its upward move towards the 9,000 mark, while on the downside, multiple supports are seen at 8,888 and then 8,820 levels,” Taparia said.
