Such a candle has a bullish connotation if it is followed by a positive close in the next session, said analysts, who see immediate resistance in the 16,20-350 range and index support at 16,000.
Wednesday’s market action indicates a chance of a round of pullback rally in the short term, said Nagaraj Shetti of
Securities, who added that there is no confirmation of any bottom reversal as of now.
“Wednesday’s sharp upside recovery could bring some hopes for bulls to make a comeback. But, the recent display of lack of strength to sustain the highs could mean a presence of strong resistance around 16,250-16,300 levels for another round of selling on a rising opportunity. Immediate support is placed at 16K level,” said Shetti.
In the last two days, the pace of selling seems to be taking a pause, a sign of the bears unwinding their short trades, said independent analyst Manish Shah.
“Nifty50 is far too below the 50-day simple moving average and sooner or later the law of averages will catch up. The index as a broad market cannot remain an outlier for a prolonged period — sooner or later it will revert to the mean,” he said.
Mazhar Mohammad of Chartviewindia.in said Wednesday’s candle formation has a bullish connotation provided, it is followed by a positive close in the next trading session.
“Moreover, our proprietary twin momentum oscillators, whose accuracy is higher around short term turning points, are in buy mode. Hence, we continue to look for a pullback trade, which if materialises, shall initially take the index to 16,650 levels. Contrary to this, a close below 16,000 level shall eventually lead to the retest of March lows present around 15,670 levels,” said Mohammad.