Stocks

Tech View: Nifty50 may stay rangebound; 17,350 to offer support

Nifty50 on Wednesday rose for the second straight session and formed a small bullish candle on the daily chart. Analysts said the 50-pack index might trade range bound with a positive bias as long as it trades above the 17,350 level. A fall below this level may attract selling pressure, they said.

A small positive candle that is placed beside the long positive candle of the previous session indicates a range-bound movement in the market after a pullback rally. This also reflects a lack of selling interest in the last couple of sessions after a sharp reversal on the downside on August 19 and August 22, said Nagaraj Shetti, Technical Research Analyst,

Securities.

Shetti said Nifty50 is placed at the 23.6 per cent Fibonacci support as well as 20-day EMA around 17,340 and the positive chart pattern like higher top and bottom is still intact.

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“We expect further upside in the coming session. However, if the short coverings don’t emerge in the next 1-2 sessions, the market could face another round of selling pressure,” he said.

For the day, the index closed at 17,604.95, up 27.45 points or 0.16 per cent.

“If the bulls fail to sustain above 17,499, eventually it can head towards its 20-day simple moving average, whose value is around 17430. In simple words, going forward, consolidation can be expected between 17,710 and 17,400 levels, whereas a downtrend shall resume on a close below 17,345 levels,” said Mazhar Mohammad of

Chartviewindia.in.

The price action in the last couple of sessions shows an overlapping structure, said Gaurav Ratnaparkhi, Head of Technical Research at Sharekhan.

“The index has now reached near the junction of the 40-hour exponential moving average and the hourly upper Bollinger Band. This setup suggests that the next leg down is around the corner. On the downside, 17,350-17,300 will be the initial target area, below which 17,000 will be the overall short-term target. On the other hand, 17,650-17,700 is the key barrier that is expected to keep the bounce in check,” Ratnaparkhi said.

Nifty Bank
Kunal Shah, Senior Technical Analyst at

, said that the index was an outperformer, having surpassed the immediate hurdle of 39,000. The index remains in a buy-on-dip mode with immediate support at the 38,500 level, where a strong base has been formed, said Shah.

“The next hurdle on the upside is placed at 39,200 and once taken out will see further short covering towards the 40,000 level on the upside,” he said.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)


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