“If we draw a rising channel from the low of April to the low of July and extend it, Nifty50 has now broken above the top end of the channel. The trend is accelerating. There may be declines for one or two days, but the line of least resistance is up. The weekly MACD is in the buy mode and the RSI is showing a reading of 74. This is strong momentum. Nifty50 has not shown any sign of a trend reversal,” he said.
For the day, the index closed the day at 17,323, up 89.45 points or 0.52 per cent.
Mazhar Mohammad of Chartviewindia.in said some of the technical momentum oscillators on the lower time frame charts continued to displayed negative divergence.
This analyst believes the index needs to sustain above the 17,200 level to retain its positive bias. In that scenario, a move towards the 17,590 level is likely, he said, adding that a fall below the 17,200 level may trigger intraday weakness.
“Major weakness should not be expected unless it closes below the 17,050 level,” he said.
Chandan Taparia of Motilal Oswal Securities said a bullish formation on both daily and weekly scales indicates a complete dominance by the bulls.
“The index saw a breakout on the weekly frame at the beginning of the week and continued to form higher highs from the last five weeks. Now it has to continue to hold above the 17,250 level to extend the move towards 17,500 and 17,777 levels. Downside support is seen at 17,200 and 17,050 levels,” he said.