Tech View: Nifty50 breaches swing high, hints at further upside

New Delhi: Nifty50 on Monday built on the momentum after a gap-up start to eventually close above its recent swing high of 16,275.50, suggesting the bulls were back in the driving seat. Analysts said that the index could be in for some more upside and a level around 16,500 looks a possibility.

The index has crossed the swing high of 16,275, said Gaurav Ratnaparkhi of Sharekhan, which shows that the Nifty50 is continuing with the pullback on the higher side.

“It is marching towards the 78.6 per cent retracement of the June decline and the key weekly moving averages. Thus going ahead, the index can test 16,500-16,550 on the upside. On the flip side, 16,140-16,100 will now act as a near term support zone,” Ratnaparkhi said.

The index closed the day at 16,278.50, up 229.30 points or 1.43 per cent. It formed a strong bullish candle on the daily scale.

“Nifty50 not only closed above its recent corrective swing high of 16,275 levels but also erased all the four-day old losses from the high of 16,275 and 15,858 levels, in just two trading sessions. This faster retracement may be hinting at the further expansion of the current pullback swing,” said Mazhar Mohammad of Chartviewindia.in.

Mohammad said that sustaining above the day’s bullish gap zone placed between 16,142 and 16,067 can help the index test the 200-day EMA, whose value is placed around 16,525 level.

“Therefore, any dip in the early part of the trading session on Tuesday can be an opportunity for short-term traders to create fresh long positions and weakness in the index shall not be expected unless this counter slips below 16,065 level,” he said.

Independent Analyst Manish Shah said that the MACD is bullish and the NSE barometer has convincingly moved above its 50-day SMA. Nifty50 should see a rally towards 16,800-16,900 over the next few days, he said, adding that the undercurrent in the market is strong and more upsides are likely.

Nifty Bank


Chandan

of

Securities noted that Nifty Bank formed a bullish candle on the daily scale and negated lower high-lower low of last four trading sessions.

“It closed the day with decent gains of around 675 points and managed to recover the recent decline of the last four sessions. Now it has to hold above 35,250 to witness an upmove towards 35,750 and 36,000,” he said.

This analyst sees downside support for the index at 35,050 and 34,750 levels.

(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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