Tech View: Nifty tops 200-DEMA as bulls stage a smart rebound

NEW DELHI: After a six-day battering, Nifty50 on Wednesday rallied to reclaim the 11,300 mark. The index, which broke above its 50-day exponential moving average (DEMA) intraday, also zipped past its 200-DEMA in late trade.

The index shut shop at 11,313.30, up 186.90 points or 1.68 per cent.

“We believe there is a strong chance of a bottom in place. The upside momentum may continue going forward,” said Sahaj Agarwal of Kotak Securities, who sees strong support for Nifty at 11,000-11,050.

The index formed a bullish candle on the daily scale and negated the formation of lower top lower bottom on the lower time frame, said Chandan Taparia of Motilal Oswal Securities.

“It has respected 61.8 per cent retracement of the entire upmove from 10,762 to 11,695. The index needs to hold above 11,250 to extend its move towards 11,400-11,450. Downside support is seen at 11,100,” he said.

As long as Nifty sustains above 11,090, one can retain a positive bias and look for initial targets of 11,400 levels, said Mazhar Mohammad of Chartviewindia.in.

“After the strong upmove, our modified twin momentum oscillators generated a buy signal and hence we expect this positive bias to stay for a couple of sessions,” he added.

Mazhar advised traders to either buy on a breakout above 11,400 on a closing basis or use dips towards 11,220 to initiate fresh longs with a stop below 11,100.