Tech View: Nifty forms a small bullish candle as consolidation continues

NEW DELHI: Nifty50 on Thursday consolidated in a 200-point range and gave a close above its 50-day moving average. The NSE barometer formed a small bullish candle on the daily scale, with an upper wick, suggesting selling at higher levels. Analysts said the index may continue to consolidate for some time before regaining strength.

The Nifty may not go beyond the 17,450 level, said Sameet Chavan of Angel One, who added that the ongoing consolidation is likely to continue.

“The levels of 17,300, 17,375 and 17,450 are the immediate levels to watch out for. On the lower side, 17,100-17,000 remains a sacrosanct support zone. Traders are advised not to trade aggressively in this congestion phase,” he said.

For the day, the index closed at 17,222.75, down 22.90 points or 0.13 per cent.

Technically, a pattern like Thursday’s indicates broader range movement for Nifty50 around 17,400-17,100 levels, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

“Having placed at the low, there is a possibility of an upside bounce in the coming session. The broader uptrend status remains intact for Nifty50 and we observe a positive sequence like higher top-bottoms on the daily chart. Any decline from here could find strong support at 17,000-16,900 level and there is a possibility of the index advancing towards 17,400-17,500 level in the near term,” Shetti said.

Shrikant Chouhan of Kotak Securities said the intraday formation indicates a continuation of a range-bound activity in the near term.

“For the bulls, 17,325 could be the immediate hurdle and below the same, a correction wave could continue up to 17,100-17,060. Above 17,325, Nifty50 could go up to 17,375-17,425 levels. Contra traders can take a long bet near 17,060 with a strict 17,030 support stop-loss,” he said.

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