The index witnessed some selling pressure around its 50-days exponential moving average and 5-DEMA which are placed around 10,614 levels. The trend might have just tilted towards the bulls as long as it holds 10,276 levels and the next target is placed around 10,700.
The Nifty50 which started with a small gap on the higher side build the momentum to reclaim its crucial resistance level of 10,600 but last hour of selloff pulled the index towards 10550 making a small bullish candle on the daily candlestick charts.
A small bullish candle is formed when the index closes higher but there is plenty of movement on either side. The candle would typically have a slightly large body.
The index witnessed some selling pressure around its 50-days exponential moving average and 5-DEMA which are placed around 10,614 levels. The trend might have just tilted towards the bulls as long as it holds 10,276 levels and the next target is placed around 10,700.
Investors are advised to stay long with strict stop losses below 10,498 levels, suggest experts. Given that most of the volatility is caused by global factors, traders should use bounce back towards 10,700 to book profits or close long positions.
The Nifty50 which opened at 10,518 rose to an intraday high of 10,637. It slipped below 10,500 levels to hit an intraday low of 10,479 before closing 100 points higher at 10,576.
“Albeit market has given up part of their gains from the highest point of the day it was a much-needed morale-boosting rally for the bulls before they signed off the day with a small bull candle,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.
“Unless bulls push the indices beyond 10,736 levels on closing basis, a constructive rally may not be witnessed in the markets. As our twin momentum oscillators generated a buy signal in today’s session along with other additional technical parameters already in buy mode we expect markets to trade with a positive bias for next couple of trading sessions,” he said.
Technically speaking short-term traders can retain positive bias as long as Nifty50 sustains above 10498 levels on closing basis breach of which may again drag it down towards 10276 levels.
“However, as the element of risk is high due to uncertainty in global markets traders are advised to close their long positions as we head towards 10700 levels owing to weekend factor in next trading session,” added Mohammad.
