Tech View: Nifty50 takes a breather but bulls are still strong

Tech View: Nifty50 takes a breather but bulls are still strong

NEW DELHI: Nifty50 on Wednesday took a breather after rising in the last couple of sessions. The index formed a bearish candle on the daily scale with a long lower wick, suggesting that the bulls made an attempt to recoup losses.

The daily technical chart suggested that the formation of higher highs on the index was intact for the 10th session. Analysts said the index has strong support in the 14,000-13,950 range. Unless this range is breached, Nifty outlook will remain positive, they said.

Gaurav Ratnaparkhi of Sharekhan said the selling pressure during the session was absorbed near the junction of 40-hour exponential moving average and the hourly lower Bollinger Band, following which the index recovered to some extent.

“The overall structure shows the index is taking a brief pause, which can continue for the next few sessions. Nevertheless, the overall outlook remains positive with a short-term target at 14,600. On the downside, the 14,000-13,950 range will act as a near-term support,” Ratnaparkhi said.

Mazhar Mohammad of said the daily formation resembled a ‘Hanging Man’ pattern. “Though such a formation is a warning sign for the bulls, it has failed to trigger reversal on multiple occasions in recent sessions. A further confirmation of the bearishness will happen only when the index breaches its near-term critical support at 13,950 level on a closing basis. If the bulls take the index beyond the 14,244 level, it may touch the 14,450 mark,” he said.

Independent analyst Manish Shah said the market undercurrent remains strong. If indeed Nifty sees a decline, it may last only a couple of days. Shah said a Hanging Man pattern in a sharp uptrend has limited impact.

Ashis Biswas of CapitalVia Global Research and Rohit Singre of LKP Securities, meanwhile, sees immediate support for the index at 14,040 level.

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