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Tech View: Nifty50 forms small bullish candle, but the bias remains negative

On the day, the index rose 30 points, or 0.25 per cent, to close at 11,870.

, ETMarkets.com|
Updated: Nov 14, 2019, 05.28 PM IST
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Tech View: Nifty forms Inside Bar, shows sign of a downward leg too
Bhavin Mehta of Dolat Capital said the 20-day EMA placed at 11,764 level remains a strong support for the index.
NEW DELHI: Nifty on Thursday rose above its immediate support at 11,850 and formed a bullish candle on the daily chart with a long wick, suggesting that the intraday fall got bought into.

But the advance-decline ratio for the day remained weak and the short-term trend remained negative.

“A small positive candle with a long lower shadow indicated the formation of a High Wave-type candle pattern,” said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

“A key lower area at 11,850 has been acting as a support despite intraday violations. Even as Nifty50 witnessed minor upside on Thursday, the negative short-term chart setup has changed. A sustainable move below 11,850-25 levels may trigger sharp weakness in the near term,” he said.

On the day, the index rose 30 points, or 0.25 per cent, to close at 11,870.

“The consolidation phase continues on the anticipated lines. But market breadth was on the negative side. We expect the index to test the 11,700 level on the downside. Any dip towards the support zone should be utilised to build longs on a positional basis,” said Manav Chopra, CMT, Head of Research for Equity at Indiabulls Ventures.

Nifty remains vulnerable to selloffs, which will be confirmed on a close below 11,839, said Mazhar Mohammad, Chief Strategist for Technical Research at Chartviewindia.in.

“In such a scenario, any downswing shall get extended further up to 11,700 level. Contrary to this, strength can be expected on any close above 11,945 level. For the time being, traders are advised to remain neutral,” he said.

Bhavin Mehta of Dolat Capital said the 20-day EMA placed at 11,764 level remains a strong support for the index. He sees the recent peak of 12,000 as a major supply zone.

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Trade setup: Nifty50 faces strong resistance zone, tread cautiously

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