Tech View: Nifty50 takes out 18K, but strength missing – Heemang Parmar

Nifty50 on Tuesday climbed for the fourth straight day and, in the process, took out the 18,000 level on a closing basis, the first time since April 4. The 50-pack index, which is trading above its key short and long-term averages, formed a small bullish candle on the daily chart, with wicks on both the sides, reflecting the indecisiveness among traders at high.

Analysts see an upside hurdle for the index at 18,150 while they see immediate support for the index at 17,925-900 level.

Tuesday’s market action signal a formation of spinning top-type candle at the high, said Nagaraj Shetti of

Securities, who said such a formation after a reasonable upmove or at the hurdle could be considered as a reversal pattern post confirmation.

“Hence, any weakness from here or from highs could confirm the top reversal pattern. However, a sustainable move above this pattern high at 18,088 levels is likely to negate the bearish implication. The market is gradually advancing after surpassing the resistance of the significant downtrend line (down sloping trend line connected from the top of October 21) at 17,900 levels. But, the strength of upside momentum which is required for a decisive upside breakout is missing,” he said.

For the day, the index closed at 18,070.05, up 133.70 points or 0.75 per cent.

“Technically, Nifty50 has successfully cleared the short term resistance of 18,000 and succeeded to close above the same, which is broadly positive. On daily and intraday charts, the index is holding an uptrend continuation formation, which supports further uptrend from the current levels. For Nifty 50, 18,000 and 17,925 would act as key support levels while 18,150 -18,200 would be key resistance levels. Below 17,925, the uptrend would be vulnerable and could slip till 17,850-17,800,” said Shrikant Chouhan of Kotak Securities.

Nifty Bank

The banking index closed the day at 40,873.10, up 299.10 points or 0.74 per cent.

Earlier in the day, the index saw a gap up opening and sustained the level throughout the day, which, analysts said, confirms the ongoing strength.

“The index immediate hurdle is placed at 41,000 and once breached we will see sharp short coverings towards 41,500-41,800 levels,” said Kunal Shah, Senior Technical Analyst at

.

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