Tech View: Market not out of woods but Nifty’s rise towards 17,600 possible

NEW DELHI: Nifty50 on Thursday climbed for the second straight day, breaching the recent swing high of 17,324 and also the resistance of 17,350. The index reclaimed the 17,400 mark on a closing basis and formed a bullish candle on the daily chart. Analysts believe the ongoing recovery can extend to the level of 17,600. Support for the index is seen at 17,250 level.

“Nifty50 has clearly surpassed our expectations after extending the relief move beyond 17,350. We may see Nifty50 heading towards 17,500-17600. But we reiterate the market is not completely out of the woods yet. Hence, it’s advisable to stay light after nearing this zone,” said Sameet Chavan of Angel One.

The 50-pack index might have embarked on a sustainable pull back rally as it has decisively closed above its 100-day exponential moving average, whose value is placed around 17,145 level, said Mazhar Mohammad of Chartviewindia.in.

“A sustenance of 17,149 level may lead to a higher target of 17,570-660. Critical moving averages like 50- and 20-day are present in this range. Unless the supplies coming out of this critical resistance point are completely absorbed, the trend may not turn in favour of the bulls. Meanwhile, if the current recovery is owing to the weekly expiry related factors, weakness shall reemerge which may initially lead to the test of recent corrective swing low of 16,782,” Mohammad said.

For the day, the index closed at 17,401.65, up 234.75 points or 1.37 per cent.

Gaurav Ratnaparkhi of Sharekhan said the index has also broken out from an Inside Bar pattern on the daily chart and is now headed towards its key daily moving averages, which are near 17,620-17,650.

“If the index manages to surpass these crucial short term moving averages, it will unlock significant upside potential for itself. On the other hand, the near term support zone now shifts higher to 17,200-17,250,” he said.

Independent Analyst Manish Shah said if the last four days of trading is taken into account, the index has formed a Bullish Tower Bottom pattern, which is a bullish configuration.

“Nifty50 has closed above the minor resistance at 17,350 and this paves way for a rally to 17,650-17,700. On the daily time frame, we are not out of the woods and there could be selling on a rally to the resistance at 17,650. We still need to see more confirmation of a bottom in Nifty50 and how markets pan out in the next couple of days remains to be seen. For the time being, a pop up towards 17,650-17,700 is what we should be looking out for,” Shah said.