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Tech View: Hammer candle on Nifty charts signals buying at lower levels

Nifty hit an intraday low of 11,461 during the session, which partially filled bullish gap.

, ETMarkets.com|
Jul 09, 2019, 04.47 PM IST
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PTI
Mumbai: The stock market index on a display screen at the Bombay Stock Exchange ...
Nifty lost 2.70 points, or 0.02 per cent, to close at 11,555.
NEW DELHI: Nifty on Tuesday moved in its broader support range between 11,500 and 11,425 levels, before settling the day almost flat. The index formed a Hammer candle on the daily chart, suggesting emergence of buying at lower levels. Analysts said chances of a small bounce cannot be ruled out. In such a case, the 11,625 level would pose some resistance. On the downside, the 11,460 and 11,425 levels will offer support.

For the day, Nifty lost 2.70 points, or 0.02 per cent, to close at 11,555. The index hit an intraday low of 11,461 during the session, which partially filled the bullish gap that had occurred on May 20.

“The index formed a Hammer-like candle on the daily scale, as some buying interest was seen in the 11,480- 11,500 zone. The supply pressure is intact at 11,600. As long as the index holds below 11,650, the immediate structure will remain under pressure and the index can test the next major support at 11,420,” said Chandan Taparia of Motilal Oswal Securities.

Nagaraj Shetti of HDFC Securities believes Nifty is in the process of showing some upside bounce from the lows in the short term.

“Important support range to watch is 11,450-425, while a crucial overhead resistance is placed around 11,625,” Shetti said.

Mazhar Mohammad of Chartviewindia.in said an even advance-decline ratio perhaps is suggesting value buying at lower levels and one can expect a pullback attempt in the next session.

“In case a sustainable pullback materialises, Nifty should ideally head to test its 50-day exponential moving average, whose value is placed around 11,714 level. Contrary to this, a breach of the 11,460 level shall negate the optimistic outlook and can initially drag the index towards 11,426 level,” he said.

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