Tech View: Nifty forms Hammer-like candle; needs follow-up buying
A hold below same level could drift it towards its major support at 11,500, and then 11,460.
The index needs follow-up buying and a sustained close above the 11,600-650 range to resume an uptrend, said analysts.
“The index is consolidating around the demand line of its 18-month-old ascending channel. On Monday, it bounced back after coming close to support placed around the said channel, resulting in a Hammer kind of formation, which should have bullish connotations, provided there is follow-through buying next session,” said Mazhar Mohammad of Chartviewindia.in.
The index rose 35.85 points, or 0.31 per cent, to 11,588. During the day, it breached the all-important 11,600 level in intraday trade but saw selling pressure as the session progressed. The index later took support at its 100-day moving average placed around the 11,530 level, before settling near the 11,600 level.
“Nifty has strong resistance near the 11,650 level. As long as it trades below this level, we may see profit booking on every rise. Any close above 11,650 level can lead in good short covering, which may push the index towards the 11,700-11,750 zone. Support for the index is seen in the 11,530-11,480 zone,” said Rohit Singre of LKP Securities.
Chandan Taparia of Motilal Oswal Securities said the index needs to hold above 11,550 to extend its bounce towards the hurdle at 11,650. “A hold below the same level could drift it towards its major support at 11,500, and then 11,460,” he said.