NEW DELHI: Nifty50 on Monday extended the gains, but negated a higher low that it was making for eight sessions. The index formed a ‘Hanging Man’ candle on the daily chart, that usually suggests exhaustion of the ongoing momentum.
Analysts said the price chart is looking extremely bullish and one should not expect weakness in Nifty50 unless it breaches the critical short-term support at 13,950 level on a closing basis.
“If the bulls manage to push the index beyond the 14,148 mark, the rally would initially get extended towards the 14,280 level, whereas a breach of the 13,950 mark on a closing basis should ideally trigger a downswing and pave the way to trade on the short side,” said Mazhar Mohammad of Chartviewindia.in.
For the day, Nifty closed at 14,132, up 114.40 points or 0.82 per cent.
Aditya Agarwala of YES Securities said the index has approached the upper end of the channel pattern placed in the 14,150-14,170 range.
Check out the candlestick formations in the latest trading sessions
ETMarkets.com“A breakout and sustained trade beyond this channel resistance could extend the gains to 14,300 level. However, any failure to break out of this crucial channel resistance may trigger profit booking and drag the index lower to 13,850-13,750 levels,” he said.
Shrikant Chouhan of Kotak Securities said ‘Hanging Man’ is an indecisive pattern, but due to excessive strength in the market, it is acting as a bullish continuation formation.
“On Tuesday, the 14,200 level would be a major hurdle point for the market. It is advisable to take some profit on the long positions around the given levels. On the other side, the 14,050 level would be a major support for the market. A close above the 14,200 level would be a positive for the market,” he said.
ETMarkets.comAs the momentum is strongly favouring the bulls at this point in time, traders with high risk appetite should look to intraday dips with a stop below 13,950 level for a target of 14,270, Mazhar said.
Source Link
