• 08/08/2022 10:26 pm
NEW DELHI: While Nifty50 ended flat on Thursday, it still managed to hold above the 11,300 level. The index continued to form indecisive candles, Thursday’s one being a ‘Spinning Top’, on the daily chart. It has been trading in a narrow range for some time and is facing selling pressure at higher levels. Analysts, however, expect a breakout soon.

“Weakness on the price chart is accompanying a weakening momentum on the RSI indicator which appears to be developing a negative divergence with a lower top. It is throwing up odds in favour of the bears. The contraction of Bollinger Bands on the daily chart is also hinting at a breakout in Nifty sooner than later, which should pave the way for a swift move in either direction,” said Mazhar Mohammad of Chartviewindia.in.

Independent analyst Manish Shah said the index needs to break above the 11,370 level with a long candle, for it to move higher towards the 116,00-11,800 zone.

“Other global indices such as Japan’s Nikkei225 and German DAX30 are moving out of their trading ranges. Eventually, there should be a breakout on the upside. Out of abundant caution, the 11,250-11,230 zone should be watched carefully. If Nifty50 breaks below this level, we could see a decline to the 11,050-11,100 zone over the next couple of days,” he said.

“Any sustainable move above the 11,340-11,360 zone will cause an upward breakout and Nifty may head towards the 11,400-11,450 zone. On the downside, any breach of the 11,260-11,250 zone may signal profit booking and a dip towards 11,200-11,150 levels,” said Rajesh Palviya of Axis Securities. He said momentum indicator Stochastic has turned bearish from the overbought zone, which indicates a possible consolidation going forward.

Followup buying is missing near the 11,350 mark, said Chandan Taparia of Motilal Oswal Securities. “At the same time, declines are getting bought into. The index needs to hold above 11,200 level to move towards 11,400 and 11,500 zones. Downside supports exist at 11,200 and 11,150 levels,” Taparia said.

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