Nifty50 Shows Positive Signs but Caution Prevails: Technical Analysis Update

The Nifty50 index showed some positive signs with a 1% jump and the formation of a bullish candle on the daily chart, following a previous day of indecision indicated by a Doji candle. Analysts are cautious, however, about declaring a short-term bottom, noting that the index has significant support around the 16,800 level.

Rohit Singre of LKP Securities noted that the Nifty50 managed to close above the strong resistance of 16,900, which could now act as a strong support level, followed by 16,800. Singre suggested a “buy on dip” strategy near 16,800, with the immediate hurdle seen around the 17,000-17,100 zone.

The index’s closure at 16,955.45, up 184.60 points or 1.1%, was a positive sign. However, Mazhar Mohammad of Chartviewindia.in cautioned that while the Nifty50 showed strength by closing the bearish gap in the 16,840-966 zone, it is premature to call a bottom based on the recent corrective swing low of 16,410. Sustaining above 16,970 could lead to further gains towards 17,500, but a close below 16,800 could bring back sideways movement with a negative bias.

Gaurav Ratnaparkhi of Sharekhan mentioned that the Nifty50 has filled the gap on the daily chart between 16,840-16,966 and has reached a falling trendline on the hourly chart. He highlighted the key barrier at 17,000, stating that a successful breach could lead to a recovery towards 17,200, while a failure could push the index back towards the daily lower Bollinger Band around 16,670.

In summary, while the Nifty50 has shown some positive momentum, especially with the closure above 16,900, analysts remain cautious and suggest monitoring key levels such as 16,800 and 17,000 for further clues on the index’s direction in the near term.