Gaurav Ratnaparkhi, Head of Technical Research of Sharekhan said the hourly chart suggests that the index had formed a base triangle on October 29.
“The pattern broke out on the upside on Monday and the Nifty50 witnessed follow through on the upside. The hourly momentum indicators that were pushed into the oversold zone assisted the pullback. Consequently, the Nifty50 is now heading towards the 18,000 mark, which is a key level to watch out for. If the bulls manage to cross that level on a closing basis, the short term range will shift higher,” Ratnaparkhi said.
For the day, the index closed at 17,929.65, up 258 points or 1.46 per cent.
The index is still trading below its 20-day moving averages and, hence, it is too early to conclude that bottom is in place at the recent low of 17,613 level, said Mazhar Mohammad at Chartviewindia.in
“This pullback swing shall have a logical target of 18,224 level. More strength in the index can be expected only on a close above 18,342 level. Meanwhile, to retain the positive bias, Nifty50 needs to sustain above 17,697 level. Nevertheless, caution is warranted on the part of the bulls as none of the technical oscillators/indicators has generated a buy signal,” Mohammad said.
Further, independent analyst Manish Shah said the market is still not out of the woods.
“Nifty50 needs to show confirmed signs of a reversal. On the way up, Nifty50 is likely to see a rally towards 17,990-18,036 and this is where major resistance is likely to be. Nifty50 at least needs to close above 18,100 for initial signs of a reversal,” Shah said.
