NEW DELHI: Nifty50 on Monday breached the psychologically important 14,500 mark, but failed to hold above it on a closing basis. The index formed an indecisive candle on the daily chart, with a long upper wick, suggesting selling at higher levels.
Analysts said the index seemed to have encountered selling pressure, as it entered the bearish gap area present in the 14,526-14559 zone. As long as Nifty50 stays below 14,560 level, any rise will be vulnerable to selloff, they said.
Independent analyst Manish Shah said Thursday’s bullish Piercing Line on Nifty is giving way to bullish sentiment, but the index still needs an additional confirmation of the change in trend, which was absent in the last available data point.
“There are no reversal signals on the momentum oscillators. Nifty has immediate resistance in the 14,550-14,570 zone, and a break above that should help it move towards 14,700 level. On the lower side, the 14,350-14,320 zone should act as a key support,” Shah said.
ETMarkets.comFor the day, Nifty closed at 14,483 level, up 142 points or 0.99 per cent.
Mazhar Mohammad of Chartviewindia.in says the 14, 560 level would be crucial for Nifty.
“Any intraday weakness can be confirmed if Nifty trades below 14,390 level. The pullback attempt from the April 12 low of 14,284 perished after testing its 20-day exponential moving average, whose value today stands at 14,568 level. A bounce above this level will bring strength and the index will initially expand towards 14,700 level,” said Mazhar Mohammad of Chartviewindia.in.
Technical indicator RSI has turned down from the crucial upper end of the bear territory i.e. 60 on two occasions now, clearly indicating that the uptrend is losing momentum. If the bears push Nifty50 below the 14,870 level, it can slide lower towards the 14,770-14,650 zone. On the upside, the 15,100 level would be an immediate resistance point, and the index would need to sustain beyond this resistance for a good short-covering rally back to 15,150 and 15,225 levels,” he said.
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ETMarkets.comAditya Agarwala of YES Securities said Nifty has broken out of a downward sloping trendline resistance placed at 14,450 level, suggesting an intermediate uptrend.
“However, it is facing minor resistance at the 20-DMA placed at 14,576. A sustained trade beyond this resistance level can extend the uptrend to the 14,650-14,700 zone. On the downside, the immediate support is placed in the 14,450-14,40 zone. Any correction to these support levels can be used as an opportunity to build long positions,” Agarwala said.
He said the RSI turned upward from the lower end of the bull zone i.e. the 40-level, which suggests the market is in a temporary uptrend.
