market outlook: Tech View: Nifty forms Long Bullish Candle, may be headed to 9,300-600

NEW DELHI: Nifty reclaimed the 9,100 mark in style on Thursday. In the process, the index decisively took out its 20-day moving average and formed a Long Bullish Candle on the daily and weekly charts.

Analysts said the index has the potential to move towards 9,300 level, with the 8,800 level likely to offer support in the near term.

Rajesh Palviya of Axis Securities said Nifty has decisively broken its multiple resistance in the 8,950-9,000 zone on a closing basis, which confirms a trend reversal on the daily chart.

“Nifty has also closed above its 20 day SMA at 8,727, which signals bullish sentiment. The index broke its previous day’s high of 9,132, as well as the earlier swing high of 9,039. For the coming week, we expect the index to scale the 9,320, 9,600 levels,” he said.

For the day, the index rose 363 points, or 4.15 per cent, to 9,111. Strong value buying along with short covering was visible during the session.

“The positive momentum is likely to continue and Nifty may move towards the 9,300-9,500 zone. The 8,800-9,000 zone is likely to act as near-term support,” said Manav Chopra of Indiabulls Securities.

Gaurav Ratnaparkhi of Sharekhan said the index is approaching the upper end of a Bearish Wedge pattern. “Going forward, the 9,200-9,300 zone will be the key resistance area to watch out for. The daily momentum indicator has completed the pullback cycle till the equilibrium line. Also, the intraday momentum indicator is showing signs of weakness. Once the weakness gets reflected in price action, traders can start building short positions,” he said.