Tech view: Nifty forms bullish candle; needs to cross 10,550
NEW DELHI: The Nifty50 index advanced on Thursday but could not breach the 10,620-640 range, which is seen as the immediate hurdle for the index. The 50-pack made a bullish candle on the daily chart and needs to breach the range decisively, before there is any sustainable rally.
The index has been consolidating in the 10,625-10,500 range for last 7-8 sessions, said Rajesh Palviya, Head Technical & Derivatives, Axis Securities.
Any sustainable close above this will cause further breakout towards 10,660 and 10,700 levels. Daily indicators RSI and Stochastic have both turned flat, indicating lack of strength on either side, Palviya said.
Analysts, though, suggest the downside has been restricted for past few sessions.
Declines are being bought into, as the index has been finding multiple supports in the 10,500-10,550 range for last eight sessions, said Chandan Taparia of Motilal Oswal Securities.
For the day, the index rose 47.25 points, or 0.45 per cent, to 10,617. The index hit an intraday low of 10,586 and high of 10,628 levels.
“Now it has to hold above 10,550 to extend its move towards the 10,707-10,736 range, while on any decline, the next major support would be at the 10,500 level,” Taparia said.
Mazhar Mohammad, Chief Strategist for Technical Research & Trading Advisory, Chartviewindia.in, believes despite prevailing consolidation, the biasness was towards the bulls.
After registering a close above the 10,550 level on April 23 with a 'High Wave Candle' structure, the price action in subsequent sessions was confined to the high and low of that day, suggesting consolidation inside the 10,638-10,515 range. As none of the short-term supports were violated, an upside breakout can be expected in the new series,” he said.
Once Nifty50 manages to register a sustainable close above 10,640 level, the bulls shall march ahead towards the 10,900 level, he said, and advised traders to stay long with a stop below 10,530.