Getty ImagesNEW DELHI: Nifty50 on Friday formed a small bearish candle on the daily chart. The candle had a long lower wick, similar to the ones seen in the last couple of sessions, suggesting buying at lower levels.
On the weekly scale, the index formed a bullish candle, third in a row. This was the fourth week when the index formed a higher high-low candle.
Analysts said some indicators are sending out overbought signals and suggesting a lack of strength. They believe the index could face strong resistance at around 15,800-850 levels.
Mazhar Mohammad of Chartviewindia.in said Friday's candle resembled a 'Hanging Man' pattern, which suggests the market is stretched on the upside.
"Some of the momentum oscillators on the weekly charts are in the overbought zone. Indicators like weekly RSI have failed to maintain a pace in line with the price chart, indicating negative divergence and a lack of strength in upward momentum. Even if the bulls managed to get past 15,750, it can hardly add 150-200 points, as critical resistance seems to be placed around 15,850 level," the analyst said.
For the day, the index closed at 15,670, down 20.10 points or 0.13 per cent.
"On the weekly time frame, an MACD 'Hook' occurred. RSI has also moved above 60 and this underlying trend is strong. Weekly charts point out towards trend continuation to the 15,800-15,850 zone on the way towards 16,250 as an achievable target," said Independent analyst Manish Shah.
A MACD Hook occurs when the signal line attempts to penetrate or penetrate the MACD line and turns at the last movement.
Rohit Singre of said that the level of 15,600-15,500 will act as good support.
"Any dip near the range will be buying opportunity for the immediate bounce towards the 15,800 level, which will pose as an immediate hurdle zone. Any decisive close above that can quickly push the index towards the 16,000 mark," Singre said.
On the weekly scale, the index formed a bullish candle, third in a row. This was the fourth week when the index formed a higher high-low candle.
Analysts said some indicators are sending out overbought signals and suggesting a lack of strength. They believe the index could face strong resistance at around 15,800-850 levels.
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View Latest Stock Report »Mazhar Mohammad of Chartviewindia.in said Friday's candle resembled a 'Hanging Man' pattern, which suggests the market is stretched on the upside.
"Some of the momentum oscillators on the weekly charts are in the overbought zone. Indicators like weekly RSI have failed to maintain a pace in line with the price chart, indicating negative divergence and a lack of strength in upward momentum. Even if the bulls managed to get past 15,750, it can hardly add 150-200 points, as critical resistance seems to be placed around 15,850 level," the analyst said.
For the day, the index closed at 15,670, down 20.10 points or 0.13 per cent.
"On the weekly time frame, an MACD 'Hook' occurred. RSI has also moved above 60 and this underlying trend is strong. Weekly charts point out towards trend continuation to the 15,800-15,850 zone on the way towards 16,250 as an achievable target," said Independent analyst Manish Shah.
A MACD Hook occurs when the signal line attempts to penetrate or penetrate the MACD line and turns at the last movement.
Rohit Singre of said that the level of 15,600-15,500 will act as good support.
"Any dip near the range will be buying opportunity for the immediate bounce towards the 15,800 level, which will pose as an immediate hurdle zone. Any decisive close above that can quickly push the index towards the 16,000 mark," Singre said.
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