Tech view: Nifty forms bullish candle; near-term indicators favour the bulls

The bulls are gradually trying to strengthen their footing on Dalal Street, as near-term indicators are show an upward momentum may continue in the coming session. NSE’s Nifty50 index opened with an upward gap on Monday and remained in consolidation during the first half. However, buying momentum in later-half led it to close with almost 80-point or 0.77 per cent gain at 10,888.

After opening at 10,853, the index hit an intraday high and low of 10,900 and 10,844. During the process, it formed a bullish candle on daily chart.

Rajesh Palviya, Head of Technical & Derivatives Analyst, Axis Securities, said the daily price action has formed a bullish candle and has closed above past two sessions consolidation range indicating strength ahead.

“For the day, the 10,900 level remains a crucial resistance to watch out for, as any sustainable movement above this level will provide further strength and take Nifty towards the 10,940 and 11,000 levels. On the downside, the 10,850 level will act as an immediate intraday support. Daily strength indicator RSI and the momentum indicator Stochastic both are in a bullish mode indicating upward momentum to continue,” Palviya added.

The index also remained above its 200-day moving average throughout the session. Nifty is now approaching towards its 100-DMA which is placed at around 10,940.97.

Aditya Agarwala, Technical Analyst, YES Securities said, “Nifty’s 100-DMA placed between 10,940-10,960, a sustained trade above this resistance zone will confirm the short-term trend reversal in favour of the bulls taking the Index to levels of 11,100-11,200.”

For upcoming trading sessions, Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia said, “Traders at this point in time shall remain cautious and maintain a tight stop below 10,800 on closing basis. Contrary to this if strength continues on the upside initial targets shall be 10,940 and thereafter a bigger target of 11,069 can’t be ruled out.”