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    Tech View: Nifty's long bullish candle gives the bulls a leg up

    Synopsis

    The index settled 140.30 points, or 1.20 per cent, higher at 11,831.

    Nifty's dollar returns slip, IT companies give supportGetty Images
    The bounce has brought Nifty closer to the upper end of a falling channel and the 20-day SMA.
    NEW DELHI: Nifty50 on Thursday tested its 50-day simple moving average (SMA), but staged a sharp recovery later. In the process, the index ended up forming a long bullish candle on the daily chart. It now faces immediate resistance at the 20-day SMA at 11,866.

    Sameet Chavan of Angel Broking said the index has formed a ‘Bullish Wolfe Wave’ pattern on the hourly chart, whose ‘potential reversal zone’ was at 11,630.

    “Since last three days, Nifty50 was rebounding sharply after making lows precisely around this point and, on Thursday, the pattern finally showed its significance. In addition, the higher end of the upward gap area created after exit polls was around 11,591 and we were of a firm opinion that this gap area will not be violated. Thursday’s rally validated it,” he said.

    For the day, the index settled 140.30 points, or 1.20 per cent, higher at 11,831. The index tested its daily lower Bollinger Band in intraday trade, but the band not only held ground, but also induced the bulls to push the index higher.

    “The bounce has brought Nifty closer to the upper end of a falling channel and the 20-day SMA. The 11,850-11,870 range thus became a key hurdle zone to watch out for. If the bulls manage to surpass the resistance, the index rally can stretch towards the 12,000 mark,” said Gaurav Ratnaparkhi of Sharekhan.

    This strong recovery appears to have paved the way for the much-awaited pullback rally towards 12,000 level, as short-term critical hurdles are all cleared, said Mazhar Mohammad of Chartviewindia.in.

    "However, on the way upside, the 11,920 level can be the initial target for any upswing and a decisive close above 11,930 can eventually lead Nifty to the test its lifetime high at 12,100 level,” he said.



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    (What's moving Sensex and Nifty Track latest market news, stock tips and expert advice, on ETMarkets. Also, ETMarkets.com is now on Telegram. For fastest news alerts on financial markets, investment strategies and stocks alerts, subscribe to our Telegram feeds .)

    Download The Economic Times News App to get Daily Market Updates & Live Business News.

    Subscribe to The Economic Times Prime and read the Economic Times ePaper Online.and Sensex Today.

    Top Trending Stocks: SBI Share Price, Axis Bank Share Price, HDFC Bank Share Price, Infosys Share Price, Wipro Share Price, NTPC Share Price

    ...more
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