Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan said the internal structure of the recent rise shows that Wednesday’s negative close is a minor pause and the short term pullback is still intact.
“The index is expected to witness fresh buying support near 16,200. Thus, this minor degree dip can be taken as a fresh buying opportunity from a short term trading perspective. On the higher side, the short term target is pegged at 16,500. The level of 16,000 will act as a support for the short term,” Ratnaparkhi said.
The index hit an intraday high of 16,399.80, before closing the day at 16,240.30, down 19 points or 0.12 per cent.
After Tuesday’s strong move, said Mazhar Mohammad of Chartviewindia.in, such a minor weakness can be considered as an opportunity to create fresh long positions as near term trends may remain positively biased in favour of the bulls. This is as long as the index sustains above the 15,900 level, he said.
“In such a scenario, on resumption of the upmove, the index can test its 20-day simple moving average, whose value is around 16,635 levels. Interestingly, the said average is also falling inside the bearish gap zone of 16,484 and 651 levels, registered on May 6. Therefore, weakness in the short term support zone of 16,200-150 levels will be an opportunity to go long with a stop below 15,900 level,” Mohammad said.
Meanwhile, on a 15-minute chart, the positive moving average crossover is still intact as the 20-period MA is trading above the 50-period MA, said Subash Gangadharan, Senior Technical and Derivative Analyst at Securities.
“Nifty50 looks set to witness a further pullback rally in the very near term as long as the crucial support of 16,071 is not broken,” Gangadharan said.
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