Tech view: Hammer candle on Nifty charts signals buying at lower level
NEW DELHI: The Nifty50 traded in a narrow range on Friday and could not take out the 10,600 level by the days close. The index formed a Hammer candle on the daily chart, suggesting buying at lower level.
Follow-up action was missing on either side, as the index consolidated in the 10,450-10,650 range for the entire week, said Chandan Taparia of Motilal Oswal Securities.
“The index needs to hold above 10,500 level to extend its upmove towards the 10,650 -10,750 range. Multiple supports are seen around 10,450 and 10,380 levels," Taparia said.
For the day, Nifty fell 13.20 points, or 0.12 per cent, to 10,585.
The index has formed a small positive candle on the weekly scale after a sharp upmove in the previous week, signalling a breather-type pattern. Normally, a breather pattern signals a temporary halt to the upside momentum, but is considered a continuation pattern of an uptrend, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.
"Hence, Niftys near-term trend is range-bound and eventually, this action could result in an upside breakout in the coming weeks,” Shetti said.
Mazhar Mohammad of Chartviewindia.in advised traders to avoid long side bets unless Nifty registers a breakout on the upside with a strong close above 10,620 level.
"Essentially, as it is looking like a directionless market, traders should focus on stock-specific opportunities in both directions for time being till the index registers a breakout on either side,” he said.