Tech View: Nifty above 20-, 50-DMAs, but may continue to consolidate

Tech View: Nifty above 20-, 50-DMAs, but may continue to consolidate

NEW DELHI: Nifty50 climbed for the second straight session on Tuesday and formed a long bullish candle on the daily chart, and that happened after a gap up start. In the process, the index closed above the 20-day and 50-day simple moving averages.

Analysts said the index has almost retraced the last leg of losses from the highs of 14,878 to 14,264 levels in last two sessions. But they believe the index may continue to consolidate going forward.

Mazhar Mohammad of said the bulls need to defend Tuesday’s bullish gap zone present in the 14,617-14,572 zone, and the ongoing bullish optimism may fade away below this level.

“If the index sustains above its interim top of 14,878 level, the upswing may ideally extend towards its logical target of 15,100 level,” he said.

For the day, Nifty closed at 14,845, up 337 points or 2.33 per cent. The gains helped the index close beyond the key short-term moving averages at 20-DMA and 50-DMA levels.
“The bulls need to push the index beyond the next crucial resistance in the 14,870-14,900 zone to trigger an extended short-covering rally to the 14,960-15,050 zone. Technical indicator RSI has turned upward after taking support at the lower end of the bull territory, suggesting that the uptrend is still intact and a move above 14,900 level can take the index all the way up to its recent highs in the 15,250-15,300 zone,” said Aditya Agarwala of YES Securities.

Check out the candlestick formations in the latest trading sessions

Gaurav Ratnaparkhi of Sharekhan said the index has started recovering from the 61.8 per cent retracement of the entire February rise as well as from the lower end of a Wedge pattern.

“The positive momentum continued on Tuesday. The index fell short of the swing high of 14,878 and going ahead the 14,900-15,000 zone will be a crucial area to watch out for. Once that range is taken out, Nifty will be considered to have resumed the larger uptrend and will be set to test the high of 15,431,” Ratnaparkhi said.

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