NEW DELHI: Nifty50 on Friday capitalised on a strong gap-up start as the index ended almost at day’s higher. In the process, it breached its immediate resistance level of 16,150 and formed a bullish candle both daily and weekly scales. Analysts said more upside is in the offing and advised traders to be cautiously bullish for the week ahead.
The steep decline of May 19 was arrested near the swing low of 15,735, said Gaurav Ratnaparkhi of Sharekhan, who added that the March low of 15,671 offered additional support on the downside.
“With this, it filled up the recently created gap area on the daily chart. Going ahead, the index is set to test the upper end of a reverse falling channel and the swing high of 16,400, which is a key barrier to watch out for. On the flip side, 16,100-16,000 will act as a near term support zone,” Ratnaparkhi said.
For the day, the index closed at 16,266.15, up 456.75 points (2.89%).
The daily timeframe of the Nifty50 indicates that the index has made a double bottom around the 15,735 levels, said Subash Gangadharan, Senior Technical and Derivative Analyst, HDFC Securities.
“While we remain open to further pullback rallies in the very near term, we must remember that the intermediate trend remains down. The bears would gain more control once the recent intermediate low of 15,735 is broken. Till then, enjoy the rally till it lasts,” he said.
Despite the rebound, we feel the market has not reached its bottom, since price patterns on the Nifty50 show that the uptrend has been significantly harmed, said Yesha Shah, Head of Equity Research, Samco Securities.
“Similarly, a Head and Shoulder breakdown has been seen on the weekly chart of the S&P500 index. Having said this, a short-term rebound cannot be ruled out and at this point it is unclear if the bounce will be a relief rally or the start of a fresh bullish surge. Taking all of this into account, we recommend that traders keep a cautiously bullish stance for the coming week as long as the Nifty does not break below 15,700 levels,” Yesha said.
Nifty Bank
Bank Nifty has formed a Bullish candle on daily and weekly scale and a small follow up could trigger some more bounce to higher zones, said Chandan
of Securities.
“It has to hold above 34,000 to extend this move towards 34,500 and 34,750 while on the downside support exists at 33,666 and 33,500 zone,” Taparia said.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
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