Levels around 18,350 may pose a key hurdle while support for the index is seen at around 17,800 levels, they said.
A key takeaway from Monday’s price action was the reversal from the intraday low of 17,836 levels. Mazhar Mohammad of Chartviewindia.in said now the short term trend has reversed in favour of the bulls.
“Sustaining above 17,836 level, Nifty50 can strengthen its upswing towards its interim top present around 18,342 levels. If Nifty50 slips below 17,836 levels on a closing basis, it may resume the downswing. For the time being, traders should remain long on the index and also consider creating fresh long positions on dips for a trading target of 18,340 level, with a stop loss placed below the 17,830 level,” Mohammad added.
For the day, the index closed at 18,068.55, up 151.75 points or 0.85 per cent.
Gaurav Ratnaparkhi of Sharekhan said the short term range has shifted higher. “Nifty50 is expected to march towards 61.8 per cent and 78.6 per cent retracement of the entire decline from 18,604 to 17,613. The key Fibonacci levels are 18,225 and 18,392, respectively. On the other hand, 18,000-17,950 will now act as a near term cushion,” he said.
A Bullish Hammer pattern is a sign of a change in the sentiment, said independent analyst Manish Shah. A short-term rising trendline is also violated and the market is poised to move higher, he added.
“On the lower time frame, MACD is still in a sell mode but it is a lagging indicator. Price action analysis is always a leading indicator and price action does seem to point towards a swift rally,” Shah said.
