Nifty50 seems to have smartly recoiled after testing its 20-day simple moving average, which has resulted in a Hammer kind of formation, said Mazhar Mohammad of Chartviewindia.in.
“Usually this kind of formation should have bullish connotations, provided a follow-through buying is witnessed in the next trading session. In that scenario, some pullback with targets towards 18,476 can be expected. However, a resumption of the uptrend will be confirmed only on a close above 18,604 levels,” he said.
For the day, the index closed at 18,125.40, up 10.50 points or 0.06 per cent.
“Going ahead, 18,000 becomes key support now and as long as it remains above that level, there is no reason to worry. However, we do not expect Nifty50 to give a complete recovery from hereon. Rather, 18,250-18,300 would be a stiff hurdle and it would be a daunting task for the bulls to overcome. As of now, banks have managed to defend the benchmark index. If we see any profit booking on banks, it may not augur well for the bulls,” said Sameet Chavan of Angel Broking.
Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan at said the 20-DMA induced the bulls into the action, rescuing the index for the day. Nifty50 has managed to hold on to the crucial support of 18,000 on a closing basis, he said, adding that the hourly lower Bollinger Band has become flat, which is expected to provide support on the downside.
“Also, the hourly momentum indicator has developed a positive divergence, which is suggesting that a bounce is around the corner. Nifty50 can drift towards 18,300-18,360,” he said.
