Tech view: Nifty forms small bullish candle but bears are still in the game

NEW DELHI: Nifty50 on Friday climbed for a third straight session and formed a small bullish candle on the daily chart. The index made higher high higher low formation for the second in a row, suggesting momentum was shifting in favour of the bulls. 

That said, the tug of war with the bears is evenly balanced. Levels around 10,890 would be crucial for Nifty, a breach of which may intensify buying momentum. 

“The index touched its 78.6 per cent retracement level and traded around it throughout the trading session. However, in the final hour, the index cooled off a bit. Bears are still in the game as they managed to defend the 78.6 per cent retracement mark,” said Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan by BNP Paribas. 

Ratnaparkhi feels the 10,764 level will be a crucial support level. “The scope for a correction towards 10,534 and beyond is likely if the index breaches the level. On the flipside, 10,985 will be a key resistance level to watch out for,” he said. 

The index rose 80.10 points, or 0.74 per cent, to 10,859.90 on Friday. 

It formed a Bullish candle on the daily scale and Hammer candle on the weekly scale, which implies declines were being bought into the market. 

“Were the index to hold 10,750-10,777 range, it would extend its recent gains towards crucial hurdle of 10,985 level. On the downside, support exists at 10,777 level,” said Chandan Taparia of Motilal Oswal Securities. 

Subash Gangadharan of HDFC Securities shared similar view. This expert sees further upside once the immediate resistances of 10,893 is are taken out. “Crucial support to watch for any weakness is at 10,820,” he said. 

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