NEW DELHI: Nifty50 jumped in late trade on Tuesday and eventually formed a bullish candle on the daily chart.
That said, the trading range did not expand and was within the previous session’s high-low range. With the advance-decline ratio still in favour of the bears, upsides, in any, remained vulnerable to selloffs. The index may need to move past the 11,710-61 range to instil confidence, said analysts.
The index formed an ‘Inside Bar’ for the day, said Gaurav Ratnaparkhi of Sharekhan, who added that sideways trading over the past few sessions has taken the form of a distribution triangle on the hourly chart.
“The index moved up towards the upper end of the pattern to complete the distribution. Thus the 11,680-11,710 range seems to be a high probability area to initiate a fresh short position. A reversal of the bearish stance can be assumed above the recent high of 11,761. On the downside, the key target area is in the 11,300-11,250 range for the short term,” he said.
Rajesh Palviya of Axis Securities said the index has been consolidating in the 11,730-11,560 range for the past eight sessions, indicating a sideways trend.
“If Nifty sustains above 11,700, it may scale up in the 11,750-11,780 range. On the downside, the 11,630 level will remain an immediate intraday support,” he said. For the day, the index rose 67.45 points, or 0.58 per cent, to 11,671.
Mazhar Mohammad of Chartviewindia.in said a bullish candle on the daily chart contrasts with the advance-decline ratio, which was skewed in favour of the bears.
“Besides, the daily MACD indicator also generated a sell signal in the last session, pointing towards fading momentum on the upside. While selling pressure may not get accelerated unless Nifty breaches the 11,549 level, upsides look limited unless the bulls manage a decisive close above the 11,760 level,” he said.