Tech view: Nifty50 forms Hammer pattern, has to cross 9,580 hurdle
By Amit Mudgill
NEW DELHI: The Nifty50 fell below the 9,450 mark on Friday, before making a strong rebound to eventually close above the psychological mark of 9,500.
In this process, the index formed a green real body for the first time in eight sessions. The index formed a ‘Hammer’ pattern on daily and weekly charts and experts believe the index needs to cross the 9,580 level on a closing basis for a sustained bounce.
The Nifty50 opened the session on a weak note. The index extended its slide as the session progressed. It fell below its 50-day exponential moving average (EMA) of 9,464 to hit an intraday low of 9,448, before staging a smart rebound. The index eventually closed the day 0.18 per cent higher at 9,520.
“It was heartening to see Hammer formation on the weekly charts, as the Nifty50 recoiled after testing its 50-day EMA. Any follow-through buying over the next session with a close above the 9,576 level shall not only confirm a bottom at Friday’s low of 9,448 but also strengthen the short-term momentum,” said Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory at Chartviewindia.in.
Chandan Taparia of Motilal Oswal Securities said the Nifty50 needs to surpass the 9,560-9,580 zone on the daily chart to get into the comfort zone and extend its recent upmove.
On the downside, holding below the 9,480 mark may attract selling pressure towards 9,450 and 9,420 levels, while holding above the 9,560-9,580 zone may attract a fresh spike towards the 9,650 zone, Taparia said.
Abnish Kumar Sudhanshu, Director & Research Head, Aamrapali Aadya Trading & Investments, expects the broader range next week to be between 9,620 on the higher side and 9,300 on the lower side.
Mohammad said Friday’s intraday rebound has tilted the sentiment in favour of the bulls. “We advise traders to go for fresh longs with a stop loss below the 9,440 level. Based on the wave structure, we should see the Nifty50 head beyond the 9,700 level once this corrective structure gets culminated,” he said.
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Via:: Economic Times – Stocks