Tech View: Nifty forms bullish candle; index may face resistance at 17,600

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NEW DELHI: Nifty50 on Thursday reclaimed 17,500 and, in the process, formed a small bullish candle on the daily chart. It, however, remained below its 5-day exponential moving average (EMA). The headline index can face an immediate hurdle in 17,600-650, said analysts, who believe that the immediate support is placed at 17,350 level.

Mazhar Mohammad of Chartviewindia.in said Thursday’s move was probably a blip and not a decisive move. “The index needs to sustain above 17,351 to continue sideways consolidation with positive bias. In that scenario, the initial hurdle can be 17,600 level. Beyond that, the real challenge will emerge from its 50-day EMA, whose value is placed at 17,680 levels,” he said

For the day, Nifty50 closed at 17,536.25, up 121.20 points or 0.7 per cent.

Independent Analyst Manish Shah said, “the decline from 18,600-to 17,200 is in three ‘legs’. The size of leg one 18,600-17,600 and leg three from 18,200-17,200 is exactly the same. This pattern is also termed as zig-zag pattern in Elliott wave terms. This pattern acts as a reversal pattern at times. It is a high probability reversal pattern. As long as Nifty50 holds above 17,200-17,100, the pattern remains valid. A minimum target for this pattern is 17,900-18,000.”

Sachin Gupta of Choice Broking said that the index has pulled up with the support of the Lower Bollinger Band formation and that the Stochastic indicator has reversed from the oversold territory with positive crossover, indicating the bullish strength.

“At present, Nifty50 has an immediate support at the 17,350 level while it has resistance at 17,650,” Gupta said.

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