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Tech View: Nifty forms small bullish candle, but MACD is in 'sell' zone

Nifty closed above its near-term hurdle at the 13-day exponential moving average at 11,963.

, ETMarkets.com|
Dec 12, 2019, 04.54 PM IST
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Momentum oscillator Relative Strength Index (RSI) remained neutral and did not show any sign of divergence against the price.
Nifty50 witnessed a strong gapup opening on Thursday before signing off the session with a small bullish candle on the tech charts.

Before closing nearly 62 points higher at 11,972, the index hit an intraday high and low of 12,005 and 11,934, respectively. It opened the day at 11,944 against the previous close of 11,910.

Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia, said albeit intraday profit booking from the intraday high resulted in a slightly longer shadow, which is dominating the candle body, that itself can’t be construed as a weak sign.

“Nifty closed above its near-term hurdle at the 13-day exponential moving average at 11,963 with a gapup on a favourable advance-decline ratio,” he said.

The index negated the formation of lower highs and lows of last four sessions and supports shifted higher. Momentum oscillator Relative Strength Index (RSI) remained neutral and did not show any sign of divergence against the price.

Daily momentum indicator moving average convergence divergence (MACD) remained in the bearish zone and traded below the signal line.

“We recommend approaching the market with caution. Over exposure should be avoided and profits should be protected at higher levels unless Nifty significantly moves past the overhead resistance area,” said Milan Vaishnav, CMT, MSTA, Consulting Technical Analyst at Gemstone Equity Research & Advisory Services.

For the upcoming session, if the bulls manage to push Nifty50 beyond the 12,050 mark and close above it, then the current consolidation is likely to end, says Manav Chopra, CMT, Head Research-Equity, Indiabulls Ventures.

“Till the zone mentioned is not breached on the upside, the index will remain in a consolidation phase in the 11,700-12,000 zone,” Chopra said.

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