Tech view: Nifty makes 'high wave' pattern; bulls still need to work hard
, ETMarkets.com|
Updated: Dec 18, 2017, 07.35 PM IST
NEW DELHI: The Nifty50 swung in a wide 370-odd point range on Monday before eventually forming a 'High Wave' candle pattern on the daily chart, which suggested doubts and confusion among market participants at the end of an eventful day.
Traders were in for a rude shock as the Gujarat vote tally, against all odds, hinted at a Congress win early Monday – something the market had barely factored in price.
The index crashed to hit sub-10,100 level at 10,074. But as soon as the trend reversed, the index recouped losses to enter the positive terrain. Nifty50 eventually ended the day at 10,388 with a gain of 55 points, or 0.54 per cent.
With this, the index engulfed the price movement of last few sessions. “Technically speaking, the index registered a breakout as it closed above the 30-day-old downsloping channel that was in progress from the November high of 10,490. Traders are advised to remain on the sidelines for one more day, as only follow-through buying in the next session will confirm any expansion on the upside towards the 10,600 level. A close below 10,340 will result in failure of the breakout, which shall leave the bulls in a more vulnerable position,” said Mazhar Mohammad of Chartviewindia.in.
Rajesh Palviya of Axis Securities said the buying momentum in the Nifty50 was observed on the 100-day SMA at the 10,100 mark, which still remains a crucial support.
“On the daily chart, the index has created a downsloping 'channel' breakout at 10,350 level on a closing basis, which signals bullish sentiment going ahead. From the current level, the index is likely to scale the 10,450 and 10,490 levels, while immediate supports are seen at 10,360 and 10,320 levels," said Palviya.
The index needs to hold above the 10,300-10,330 zone to extend its move towards 10,490, said Chandan Taparia of Motilal Oswal Securities. On the downside, supports exist at 10,250 and 10,200 levels.
Mustafa Nadeem, CEO at Epic Research said there was selling pressure on the higher side since 10,400 and 10,440 levels continued to be an area of supply.
A close below these levels suggests the bulls need to put extra effort to breach these levels, as they remain a stronghold for the bears, the expert said.
Traders were in for a rude shock as the Gujarat vote tally, against all odds, hinted at a Congress win early Monday – something the market had barely factored in price.
The index crashed to hit sub-10,100 level at 10,074. But as soon as the trend reversed, the index recouped losses to enter the positive terrain. Nifty50 eventually ended the day at 10,388 with a gain of 55 points, or 0.54 per cent.
With this, the index engulfed the price movement of last few sessions. “Technically speaking, the index registered a breakout as it closed above the 30-day-old downsloping channel that was in progress from the November high of 10,490. Traders are advised to remain on the sidelines for one more day, as only follow-through buying in the next session will confirm any expansion on the upside towards the 10,600 level. A close below 10,340 will result in failure of the breakout, which shall leave the bulls in a more vulnerable position,” said Mazhar Mohammad of Chartviewindia.in.
Rajesh Palviya of Axis Securities said the buying momentum in the Nifty50 was observed on the 100-day SMA at the 10,100 mark, which still remains a crucial support.
“On the daily chart, the index has created a downsloping 'channel' breakout at 10,350 level on a closing basis, which signals bullish sentiment going ahead. From the current level, the index is likely to scale the 10,450 and 10,490 levels, while immediate supports are seen at 10,360 and 10,320 levels," said Palviya.
The index needs to hold above the 10,300-10,330 zone to extend its move towards 10,490, said Chandan Taparia of Motilal Oswal Securities. On the downside, supports exist at 10,250 and 10,200 levels.
Mustafa Nadeem, CEO at Epic Research said there was selling pressure on the higher side since 10,400 and 10,440 levels continued to be an area of supply.
A close below these levels suggests the bulls need to put extra effort to breach these levels, as they remain a stronghold for the bears, the expert said.
