Nifty50 Forms Bullish Crossover; But Don’t Go Short Yet
On Friday, it was observed that the Nifty50 snapped a six-day losing streak. It has formed a Hammer-like pattern on the daily charts. In the morning session, the index respected its 200-day exponential moving average that was nearby 10,140 levels. It is expected that this will act as a short-term support for the index. According to some analysts, momentum indicator Stochastic has formed a bullish crossover from the oversold zone. This indicates that the pullback rally might continue in future.
Believing these analysts, the index seems to form a small bullish candle. However, if this formation of bullish candle sustains above the 10,270 mark then it is possible that there is some pullback in the 10,300-10,350 range. The experts also informed that on the downside, the 10,200 level should act as an immediate support zone.
Gazing today’s scenario, you will observe that the index rose 62 points, or 0.61 percent, which means to 10,261 level. During the session on Friday, it hit a low of 10,146.
As it was seen that the index formed a Hammer pattern, so the bulls gathered daring to guard the 200-DMA. Further, in the following sessions, if the index defends today’s low of 10,146, the pullback shall get extended up to the 10,450 level. Experts also believe that as soon as the Nifty50 will break down the 10,600-300 range, then 10, 300 range will offer resistance to the bulls on the upside.
Few analysts are of the view that the RSI indicator is turning from its deep oversold territory. RSI is viewing support-based buying as well as short coverings. As of now, it is needed to hold above its immediate resistance at 10,276 in order to observe a rally towards 10,333 followed up to 10,400 levels.
Investors, as well as traders, are recommended to not to initiate short positions in the pullback rally. This is suggested because; the bulls have only a few more days to rule.