Nifty Analysis: Tech View: Nifty sees upside breakout above 15,255; this rally has legs

NEW DELHI: Nifty50 on Monday capitalised on a gap-up start and ended above the 15,300 mark for the first time. Analysts said the opening upside gap remained unfilled and the index has seen an upside breakout above the 15,255 level. They are largely positive on the index now, but feel profit booking around the 15,400-475 levels is a possibility.

Monday’s daily candle has negated the minor bearish implication created by Friday’s Doji or High Wave candle pattern.

“Nifty is now nearing an important overhead resistance around the 15,475 mark, which is the 1.618 per cent Fibonacci extension taken from the January 2020 top and March 2020 bottom. Hence, there is a possibility of minor profit booking or emergence of volatility at the highs,” Nagaraj Shetti of HDFC Securities said.

The 15,400 level happens to be the upper end of the channel and a failure to break out of the upper end of the channel may trigger profit taking till 15,150-15,070 levels, said Aditya Agarwala of YES Securities, who believes the technical indicators still favour an extended rally.

For the day, the index closed at 15,314, up 151.40 points or 1 per cent.
Independent analyst Manish Shah said Nifty has emerged out of a range over the past five sessions.

Check out the candlestick formations in the latest trading sessions

“Nifty is in a very convincing uptrend, as it seems to be in what can be classified as a meandering trend. Such trends can last a long time, as prices move up at a slow and steady pace. The momentum indicators are still positive. The RSI is placed at 70. A sharp uptrend coupled with a breach above the 70 mark could signal more upsides,” Shah said.