NEW DELHI: Nifty50 on Thursday formed a bullish candle on the daily chart and moved above its 200-day moving average. A gap-up start and a follow-up buying to a Wednesday’s reversal candle is a positive sign and more upside is in the offing.
However, the index may see some resistance at the 17,450 level, while support is at 17,200, analysts said, adding that this is a ‘buy on dips’ market.
Mazhar Mohammad of Chartviewindia.in, said a follow up to Wednesday’s Harami-kind of reversal formation is confirming a near term bottom at the recent low of 16,824 level.
“Moreover, with Thursday’s move, the index also closed above the 200-day simple moving average (17,185), giving a psychological advantage to the bulls. However, the index needs to completely bridge the bearish gap with a close above 17,457 levels. In that scenario, eventually, the strength shall expand towards 17,856 levels,” Mohammad said.
For the day, the index was at 17,392.60, up 256.05 points or 1.49 per cent.
Sameet Chavan of Angel One said that a close near the highest point of the day augurs well for the bulls.
“For the coming session, 17,450 is the immediate level to watch out for and the moment we surpass this, the index would continue its march towards 17,600 – 17,700. On the flipside, 17,300 followed by 17,200 are likely to provide an immediate cushion. Traders are advised to use declines to buy into and should continue to focus on thematic moves.
Independent analyst Manish Shah said that the index was trading in a band of 16,800-18,100 for the last several months, adding that a bullish pattern at the support does deliver more credence to the underlying price structure.
“For the day, the market saw a gap up; a rising window and that is formed is a Bullish Island reversal. The index seems to be poised to hit the top end of the range at 18,100. Whether or not Nifty50 will manage to break above the range remains to be seen. Going into the last week of April’s expiry, we expect the market to show a bullish undertone. Support for Nifty50 is at 17,210 and we cannot allow the index to break below this level if the rally has to continue,” Shah said.
Mohammad also said that the index needs to sustain above the 17,215 level to retain positive bias.
For time being it looks prudent to ‘buy the dip’ with a stop below the 17,200 level, he 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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