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He added that though analysts see further upside potential, any such rally would be restricted in the 15,700-850 range.
“The area of 15,670-15,700 was earlier acting as a support zone and is now presenting as a resistance zone as per the principle of roll reversal. Nifty 50 may move back towards 15,400 unless the level of 15,700 is removed on the basis of closing. Structurally, Nifty 50 is expected to see a consolidation where the tight range will be 15,400-15,700,” said Gaurav Ratnaparkhi of Sharekhan.
For the day, the index closed 288.65 points or 1.88 per cent higher at 15,638.80.
Milan Vaishnav of Gemstone Equity Research said Tuesday’s return was much-awaited and on expected lines due to the sharply developing RSI divergence over the past few days.
Vaishnav said that a bullish candle with a strong body indicates a directional consensus among the market participants.
“The important thing is that a rising window appeared on the candle; This results in an uptrend gap and resolves mostly with a continuation of the trend subject to confirmation. It can be expected that apart from some consolidation, Nifty 50 is likely to move towards 15,700-15,750 zone; It is an endorsement of the pattern that he violated on his way. In future, there is a gap to negotiate between 15,800-15,160 levels in Nifty 50,” he said.
Mazhar Mohamed of chartviewindia.in, however, said that a strong selling pressure could emerge near the 15,900 level. An uptrend from current levels could be capped at 15,863 levels, he said, noting that this was the top of the Long Black Day type formation registered on June 16.
“Furthermore, the lower end of the bearish gap zone of 15,886 and 16,172 registered on June 13 is also close to the current levels. Hence, the upside is looking limited between the 15,850-900 level. Meanwhile, on the downsides, Tuesday’s bullish gap zone 15,419 and 15,382 could act as support if this pullback has an upward leg,” said Mohamed.
Nifty Bank
Sandalwood
Said that Nifty Bank remained above its opening levels despite extreme volatility and closed the day with a gain of nearly 500 points.
“It formed a short bodied bullish candle on the daily frame with a longer shadow indicating higher volatility. Now, it should hold above 33,000 for a bounce towards the 33,500 and 33,750 levels. Support for the index is 32,750 and 32,500 level.
(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of The Economic Times)
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