Gaurav Ratnaparkhi of Sharekhan said the index received support as it reached the hourly lower Bollinger Band and took a leap back to the hourly upper Bollinger Band that capped upside for the day.
“Structurally, the index has moved up to retest the 20-DMA and the swing high of 17,155.
This is a key hurdle to watch out for. If this level is crossed on a closing basis, it will be set for further upside. On the other hand, a failure to cross 17,155 on a closing basis would keep the index in a consolidation mode. In that case, the index can tumble back to 16,800-16,700 in the short term,” Ratnaparkhi said.
For the day, the index closed at 17,086.25, up 82.50 points or 0.49 per cent.
The last two trading sessions of price behaviour is hinting that dip buyers might have returned to the Street, said Mazhar Mohammad of Chartviewindia.in, who believes a close above 17,160 can lift the Nifty50 towards the 17,350 level.
“A failure to sustain above the 17,000 level on a closing basis can induce some weakness, but the recent corrective swing low of 16,400 will not be under threat unless Nifty50 closes below the 16,800 level,” Mohammad said.
Independent analyst Manish Shah said that a key development was that the MACD has moved above the signal line, giving a bullish buy signal. “The markets are now on the verge of a reversal. Secondly, the reversal signal in the Nifty in MACD is coming off a bullish divergence. Bullish divergence is also seen in the RSI. The Nifty50 should see a rally towards 17,400-17,450 from here,” he said.
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