market outlook: Tech View: Nifty forms small bullish candle; momentum fading in market

NEW DELHI: Nifty50 traded in a 64-point range on Friday to eventually close a tad above the 12,350 mark. In the process, the index formed a small bullish candle on the daily chart. Nifty’s immediate support at 12,280 level stays intact, said analysts, who felt the momentum on the index is fading through it is yet to show any weakness.

“A small positive candle was formed on Friday with an upper shadow. We observed a long upper shadow in the last two candles too, which indicate the emergence of minor selling from near the 12,400 mark. But this selling pressure is not threatening the bulls at the higher levels,” said Nagaraj Shetti of HDFC Securities.

Shetti said the next hurdle for Nifty50 as per weekly timeframe is placed at the 12,400 mark.

Chandan Taparia of Motilal Oswal Securities said the index is hovering around its strong hurdle of Rising Trendline on the weekly chart. This, he said, coincides with the 100 per cent extension level of the previous up-move on the daily chart.

“Even though the index trades near its resistance level, we are not seeing any noticeable weakness in prices. Traders are advised to refrain from going for pre-emptive shorts as long as Nifty sustains above its immediate support in the 11,280-12,293 range. A major support exists at 12,150 level. On the flip side, a key resistance is placed in the 12,450-12,500 zone,” he said.

For the day, the index fell 3.15 points, or 0.03 per cent, to 12,352.

Nifty remained listless for the entire week, moving in a narrow range of 111 points, said Mazhar Mohammad of Chartviewindia.in.

“Albeit Friday’s trade remained slightly positively biased on an intraday basis, the trading range of last five sessions was tepid, hinting at a fading momentum,” Mohammad said.

“Nifty’s short-term trend remained positive. There is a possibility of an upside breakout attempt at 1,2400 level next week. A decisive move above the 12,400-450 range could lead towards the next upside in the 12,650-700 zone. A confirmation of the trend reversal could trigger a downward correction in the market,” Shetti said.