Technical view: after the disappointing gap, no additional buying will follow; 15 800 support key

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Nifty50 on Monday rose for the third session in a row, but closed below the opening level, thus forming a bearish candle on the daily chart. Analysts say the inability to see follow-on buying after a gap-down start is disappointing. The index needs to hold above the 15,800 level for momentum to remain strong, they said.

If the index falls below 15,800, the weakness could widen to the 15,600 level, said Mazhar Mohammed of Chartviewindia.in.

“In order to regain some strength, the bulls need to close at least above the 20-day SMA, which is located near the level of 15,984. In such a scenario, the strength could increase further to the level of 16,172. For now, short-term traders are advised to remain neutral on the long side, while intraday selling can be considered if Elegant drops below the 15,800 level to a modest target of 15,690,” Mohammed said.



During the day, the index closed at 15,832.05, 132.80 points, or 0.85%.

“A crucial upside resistance of 15,800 levels (previous swing lows, according to the polarity reversal concept) has been eliminated up. the opening could dampen bulls’ efforts to maintain highs,” said Nagaraj Shetty, technical research analyst.

Securities.

Angel One’s Samit Chawan advised traders to wait for a decisive breakout before betting aggressively.

“It was really disappointing to see the market fail to capitalize on the head start they got this morning. Ideally, a close above 15,900-16,000 would create a state of confusion among the bears. But it looks like they managed to contain their nerves and prevented Nifty from overcoming the wall,” Chavan said.

While the underlying trend on the lower time frame is up, we may see the price move slowly towards the expiration date in June, said independent analyst Manish Shah.

Bank Nifty

Shah said that Bank Nifty is breaking out of an inverted Head and Shoulders pattern, a bullish trend reversal pattern.

“This suggests a rally to 34,800-34,900 over the next few days. MACD went into buy mode and PDI crossed above MDI. Bank Nifty may see a steady rise over the next few days. Support is at 33,600. -33,650 and as long as Bank Nifty holds above that, the near-term bias is bullish,” Shah said.

(Disclaimer: The recommendations, suggestions, views and opinions of experts are their own. They do not reflect the views of the Economic Times)

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