Tech View: Hammer-like candle on Nifty chart suggests a wait and watch situation

NEW DELHI: Snapping a four-day losing streak, Nifty50 stayed above the 11,500 mark throughout Thursday’s session, but failed to kiss the 11,600 level by a whisker, suggesting selling pressure at higher levels. The NSE barometer formed a Hammer-like candle on the daily chart and is likely to see consolidation ahead.

It’s a wait and watch scenario, said Vaishali Parekh of Prabhudas Lilladher, who feels the 11,520 level should act as a support for the index on Friday.

“A break below the 11,500 mark should make Nifty retest the 11,430-60 levels. A bounce towards the 11,650 level can’t be ruled out, but net-net the bias remains that of consolidation,” Parekh said.

Momentum oscillator Stochastic has turned positive from the oversold zone, indicating a possible consolidation or an upward move in the near term, said Rajesh Palviya of Axis Securities.

On Thursday, the index rose 84 points, or 0.73 per cent, to 11,582.

“The index took support at the upward sloping trendline formed by joining the major lows from 2019, which are placed in the 11,470-11,490 zone. However, on the way up, the 11,600 level will act as a crucial resistance. A failure to cross and sustain above this resistance zone can lead to fresh correction, dragging Nifty lower to 11,470-11,400 levels,” said Aditya Agarwala of YES Securities.

A sustained trade above 11,600 will extend the Nifty to the 11,660-11,720 range, he said.

Rohit Singre of LKP Securities said the index has broken out of small double bottom pattern on the hourly chart, suggesting some more upside in the index.

He sees the immediate support for the index in the 11,535-11,460 zone. The index can see some push towards the key resistance in the 11,650-11,700 range, he said.