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Tech View: Nifty takes out 11,650, poor advance-decline ratio a worry

The Nifty index is fast approaching the upper end of the channel pattern at 11,680-11,690.

, ETMarkets.com|
Jul 16, 2019, 05.22 PM IST
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NEW DELHI: Nifty saw follow-through buying on Tuesday, which helped it take out its immediate resistance at 11,650 on a closing basis. The gains after Monday’s Hammer-like candle suggested a possible pullback. But a negative advance-decline ratio still raised questions over the strength of the pullback.

Besides, the index is fast approaching the upper end of the channel pattern at 11,680-11,690.

“A failure to take out this resistance may lead to profit booking and drag Nifty lower to 11,610, 11,570 levels. On the flip side, a sustained trade above 11,690 will extend the rally to 11,730 and 11,780, levels,” said Aditya Agarwala of YES Securities.

For the day, the index formed a small bullish candle on the daily chart. Nifty50 closed the day 72.70 points, or 0.63 per cent, higher at 11,661.

Ruchit Jain of Angel Broking said the NSE barometer could continue the momentum towards its 20-day EMA, which is placed at 11,700. “Followup gains above this level should ensure continuation of this bounce towards the hourly 200-SMA and the recent gap area between 11,770 and 11,800 levels. The lower time frame charts indicated a shift in the immediate support to 11,530 level.”

Buying interest was seen at lower levels, said Chandan Taparia of Motilal Oswal Securities. “As long as the index holds above 11,600, it could extend the gains towards 11,720 and then 11,750 level, while on the downside supports are seen at 11,550 and 11500 levels.”

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