Nifty Analysis: Tech View: Nifty forms Dragonfly Doji, but charts supportive of rally

NEW DELHI: Nifty50 on Monday scaled a new high and closed near the immediate resistance at 14,500 level. The index formed a higher high for the 13th session in a row, which is seen as a positive sign. Analysts said nothing concrete on the technical charts suggests the index’s ongoing rally is in danger. If anything, the index formed an indecisive ‘Dragonfly Doji’ on the daily chart.

“Such a pattern is usually seen around potential turning points, which is hinting at a balance of power between the bulls and the bears at the top,” said Mazhar Mohammad of Chartviewindia.in.

“If Nifty50 trades below Monday’s bullish gap zone at 14,383-367 levels, it can trigger profit booking. If it closes below 14,367, the correction can be slightly higher towards 14,167. Meanwhile, if the bulls manage to push the index beyond 14,500, the upswing can expand towards 14,750 level,” Mohammad said.

Check out the candlestick formations in the latest trading sessions

Aditya Agarwala, Senior Technical Analyst at YES Securities, said the index has closed beyond the channel resistance line, confirming the bullishness.

“A sustained trade beyond the 14,450 level will extend the gains to 14,550 level. Moreover, technical indicator RSI has turned higher from the 70vlevel, signalling bullishness . The immediate support is at 14,300, a breakdown from which would halt the uptrend, triggering corrections to 14,200-14,100 levels,” Agarwala said.

For the day, Nifty closed at 14,484, up 137.50 points or 0.96 per cent.

Gaurav Ratnaparkhi, Senior Technical Analyst of Sharekhan, said the crossing of the rising trendline on the daily chart shows the bulls are having an upper hand.

“The benchmark index is heading towards the short-term target of 14,600, beyond which the 15,000 level will be the next major target. On the downside, the 14,300-14,250 zone will act as a key support,” he said.