Tech View: Nifty50 in pullback mode, eyes record high levels

NEW DELHI: Nifty50 on Tuesday formed a bullish candle on the daily scale and broke above its consolidation range of 16,350-600 on the upside. This was the second session when the index made a higher high-low formation. A move above 16,700 level could give the bulls an edge over the bears, analysts said.

For the day, the index closed at 16,624, up 128.15 points or 0.78 per cent.

Mazhar Mohammad of said the index is in a pullback mode, as it sustained above the recent low of 16,376 despite witnessing a sharp correction on August 20.

“While it is too early to conclude that the index has resumed upmove, it will be safe to presume that it will be consolidating in the 16,700-400 zone w, before breaking out. For a sustainable upmove, a close above 16,700 level is required. Such a close can expand the upswing 16,900-17,000,” he said.

The all-time intraday high level for Nifty50 stands at 16,701.

On the four-hourly charts, the index has taken immediate support at Middle Bollinger Band formation, which indicates further positive moves.

“However, still, there is a hurdle at around 16,700, which may act as an immediate resistance zone. Above that, can expect 16,800-16850 to offer some resistance. The support stands at 16400 level,” said Sachin Gupta of Choice Broking.

Shrikant Chouhan of Kotak Securities said that the texture of the pullback rally indicates the index is likely to consolidate in the 16,500-16,720 range.

“As long as the index trades above the 10-day SMA or 16,500 level, the uptrend wave is likely to continue up to 16,700-16,750 levels. On the flip side, the index would be vulnerable below the 16,500 level,” Chouhan said.

Chandan Taparia of Motilal Oswal Securities said declines are being bought into and a hold above 16,600 level can extend the ongoing move towards the life-time high range of 16,700-16,750. This analyst sees Nift50 support at 16,500 and 16,380 levels.

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