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NEW DELHI: Nifty50 on Monday saw a gap-down but recouped most losses by the end, forming a bullish candle on the daily chart. While the momentum turned positive, the broader range of 17,300-16,800 stayed intact and analysts believe only a break of this range on either side would lead to a decisive move.

Nifty50 is currently placed at the valuation support and also at the 200-day EMA around 16,900 levels, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

“Previously, reasonable buying had emerged from this support and the market has witnessed minor upside bounce for 1-2 sessions at this level. Hence, there is a possibility of another round of small upside bounce in the short term. But, the long term charts remain weak and the repeated testing of lower support and a lack of strength to sustain the bounce, could eventually result in a decisive downside breakout of the 17,000-16,800 levels in the near term,” he said.



For the day, the index closed at 17,069.10, down 33.45 points or 0.2 per cent. The index stayed below its 50-day moving average throughout the session.

“Since 16,900-16,800 has earned tremendous respect in the last one-and-a-half-week, one should continue to remain hopeful that this support remains defended. We are still stuck in a range and till that time, we do not see a breakout happening outside 17,400-16,900, one should continue to buy on declines and stay light around the higher end. For the coming session, 17,200 followed by 17,300 are the immediate hurdles to watch out for,” said Sameet Chavan of

.

Mazhar Mohammad of Chartviewindia.in said that as the index bounced back smartly on a couple of occasions from sub-16,900 levels a close below it can significantly weaken the trend, with a near term target of 16,400 levels.

“For the time being, brave hearts who want to remain on the long side of the index are advised to place a stop below 16,900 on a closing basis and look for a target of 17,400,” he said.

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