market outlook: Tech View: Bulls make a comeback, but Nifty has stiff hurdle at 12,170

NEW DELHI: NSE Nifty on Wednesday snapped a four-day losing streak and formed a bullish candle on the daily chart. The followup buying witnessed after Tuesday’s Hammer candle is seen as a positive sign.

The index negated lower high and lower low formations of the past three sessions and closed above its 20-day moving average. The immediate hurdle is in the 12,170-12,180 zone.

“Nifty could rise further on the back of the confirmed Bullish Hammer pattern. Added to this, Wednesday’s action led to the formation of a Bullish Morning Star. This may have a positive implication. The index could move up to 12,250-12,290 over the next few days,” said Arun Kumar, Market Strategist at Reliance Securities.

For the day, the index closed at 12,130.30, up 137.80 points or 1.15 per cent.

“The bounce that started towards the end of Tuesday’s session turned out to be a sharp one, as the index retraced 61.8 per cent of the previous fall from 12,246 to 11,908. Over there, the index seems to have formed a Small Ending Diagonal pattern on the intraday chart, suggesting that the pullback could be near its maturity,” said Gaurav Ratnaparkhi of Sharekhan.

The next hurdle zone is placed near 12,175-12,200, Ratnaparkhi added.

Mazhar Mohammad of Chartviewindia.in said the ongoing upswing is not backed by a buy signal on any of the momentum oscillators on the daily chart.

“Initially, it needs to get past and sustain above 12,178 level and in such a scenario we can eventually expect the recent highs of 12,246 levels to be taken out,” he said.