The Nifty50 on Tuesday snapped a two-day losing run and formed a bullish candle on a daily chart. It also formed a Bullish Piercing Line pattern, which signals a possible reversal. A follow-up buying may suggest a short-term bottom is in place, said analysts.
Nagaraj Shetti, Technical Research Analyst,
Securities, said normally, such bullish piercing line patterns after a reasonable decline indicates upside reversal of a short-term downtrend.
“This also reflects the strength of a pullback rally after a steep weakness. Hence, one may expect upside bounce in the short term,” Shetti said.
For the day, the index closed at 17,577.50, up 86.80 points or 0.5 per cent.
Mazhar Mohammad of Chartviewindia.in said a follow-through buying in the next session may suggest a temporary bottom is in place at 17,345.
“In that scenario, the index can attempt to bridge the bearish gap present between 17,690 and 17,710 level registered on August 22 and a close above 17,710 can strengthen the optimism of the bulls further. Contrary to this, a fall below 17,345, on a closing basis, may resume weakness till 17,000 and 16,950 levels,” he said.
Nifty Bank closed the day at 38,697.65, up 399.90 points or 1.04 per cent.
Kunal Shah, Senior Technical Analyst at said the banking index has seen a sharp recovery from the lower level and formed a strong bullish reversal candle.
The index support stands at the 37,700-38,000 zone and as long as this support is held the index remains in a buy-on-dip mode, Shah said.
“The immediate upside hurdle stands at 39,000 where call writers are active and once surpassed will see further short covering,” he said.
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