Gold Silver Reports — A large green real candle, absence of lower wick and a small upper wick confirmed that the Nifty50 for med a `Bullish Belt Hold’ pattern on the daily chart on Thursday, suggesting that the positive sentiment may continue going ahead.
An `Inverted Hammer’ like pattern on Wednesday had hinted at a trend reversal and the bullish candle on Thursday only supported the view. But the pattern should not be studied in isolation.
Experts noted that the index not only closed above the 13-day exponential moving average (EMA), but also filled the downside gap zone of 9,087-9,073 of Wednesday . It suggests that the immediate bottom for Nifty50 might have been formed at 9,019.
“The index has negated its formation of lower highs, lower lows of previous three sessions and now a hold above 9,075 could extend its momentum towards 9,160 zone, while on the downside, supports are seen at 9,050 and 9,020,“ said Chandan Taparia, derivatives & technical analyst at Motilal Oswal Securities.
The Nifty50 opened the day at 9,048.75. It saw weakness in the initial session, but at no point of the day it fell into the negative zone.The index hit a high of 9,099.05, few basis points short of 9,100 level. But a closing at 9,086.30, up 55.85 points, 0.62% -the first bullish candle in five sessions -was promising.
A `Bullish Belt Hold’ pattern formed after a gapdown opening seen in the previous session points towards a trend reversal.
Mazhar Mohammad, chief strategisttechnical research & trading advisory at Chartviewindia.in said, “The price action clearly vindicates our wave counts, pointing towards one more leg on the upside, which shall take Nifty50 beyond 9,218 levels.“
“Traders shall continue to maintain positive stance and take fresh positions on long side with a stop below 9,019 levels.“
Some experts though remain cautious.
“Closing at almost high point of the day is a sign that the market is consolidating. There could be a chance you might see some bit of tempering off on Friday ,“ said Kunal Bothra, an independent analyst. — Neal Bhai Reports