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Favorable outlook: Tech View: Nifty forms bullish candle for 2nd week, but analysts see weakness ahead

Nifty50 on Friday ended the week above 17,800 for the first time since January. However, the 50-pack index failed to keep its momentum and ended the session forming a bearish candle on a daily scale.

On the weekly scale, the NSE barometer formed a bullish candle for the second consecutive week. Although still unconfirmed on the chart, analysts say there is a high chance of a downtrend in the coming days.

Mazhar Mohammad of Chartviewindia.in said the daily candle looks like a ‘Bearish Belt Hold’ formation and that the price action since August 19 appears to be happening more like ‘Flat’ in Elliot wave parlance with three bearish move and three more moves in the counter-trend direction.

Smart talk



“If this observation is correct, sooner or later a bearish bias will emerge, with ultimate targets currently below 17,166, although still awaiting confirmation on the matter. However, to regain the upper hand. , the bulls need to initially close above 17,992 and eventually break above 18,114 to propel the mid-term trend in their favor,” he said.

During the day, the index closed at 17,833.35, up 34.60 points, or 0.19%.

Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan said that unless it breaks above 18,000, Nifty50 is expected to be in consolidation mode next week.

“Internal structure suggests the index is bracing for a downtrend. A test of 17,500 is expected in the coming sessions. The broader market indexes are also poised to consolidate recent gains.” he said.

Nagaraj Shetti, Technical Research Analyst at

Securities, said the weekly bullish candle of Nifty50 shows that the index has attempted to break out of the downward sloping trendline around the 17,800 level.

“The inability to see further buying from here could mean a slight downside correction for the market ahead,” he said.

Bank Nifty
During the day, Nifty Bank closed at 40,415.70, up 106.75 points or 0.51%.

Chandan

Among them, the index formed a small-bodied Bearish candle on a daily scale and closed the highest in the last 216 sessions. It formed a Bullish candle on a weekly scale and closed its highest ever weekly close, he noted.

“It must now hold above 40,250, to rally to 40,750 and 41,000 while support is located at 40,000 and 39,750 zones,” the analyst said.

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

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