“The recent Nifty50 rally from the low of 16,162 level to a high of 16,589 has dragged certain momentum oscillators into the overbought zone. Some caution is warranted on the part of the bulls, even though there are no apparent sell signals on the lower time frame charts,” said Mazhar Mohammad of Chartviewindia.in.
Mohammad said a fall below the 16,480 level may result in a sideways trend for Nifty50 with a negative bias. He advised traders to book profit if the index slips below the same. For the day, Nifty closed the day at 16,563, up 33.95 points or 0.21 per cent.
Gaurav Ratnaparkhi of Sharekhan said an hourly momentum indicator is showing weakness. “It has turned its trajectory down from the overbought zone. Thus, the index can step into a minor consolidation, before heading higher. The consolidation can take place near 16,450-16,600 range post which the Nifty50 can head towards 16,800 in the short term,” he said.
Rohit Singre of LKP Securities said traders should use any dip to make fresh longs near 16,500-16,440. He advised traders not to make fresh longs, as risk-reward does not look favourable. This analyst sees resistance for the index in the 16,600-16,500 range.
Shrikant Chouhan of Kotak Securities said that the index has formed a breakout continuation formation for the day. The texture of the chart, he said, suggests that the 16,450-16,400 range would act as key support for the day traders.
