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Tech View: Nifty crosses key moving averages to signal a breakout ahead

NEW DELHI: Nifty50 had a positive session on Tuesday, as it breached its immediate resistance at 15,750 level with ease. The index formed a small bullish candle on the daily scale, with a long wick, suggesting that every intraday selling got bought into. Analysts said the 15,900-15,915 zone would pose a key hurdle and the 15,650-632 range would act as immediate support going ahead.

Gaurav Ratnaparkhi of Sharekhan said the index broke out of its triangular pattern on the hourly chart, retested the breakout line and moved up.

“On its way up, Nifty crossed the key daily and hourly moving averages. The 15,650-15,600 range has indeed proved to be a key support zone. The index is headed towards the subsequent barrier at 15,900 and 15,915 levels, which hold the key for a larger upside,” he said.

Independent analyst Manish Shah said the 15,900-15,950 zone has been tested three times. “The general rule is that the price should go through the fourth time. Odds of an upside breakout are higher,” he said.

For the day, the index closed at 15,812, up 119.75 points or 0.76 per cent. The 50-pack index has been moving in the 15,632-15,915 range for the last 15 sessions, said Chandan Taparia of Motilal Oswal Securities.

This analyst believes a decisive breakout of the range will commence the next leg of the rally. A hold above the 15,800 level is a must for Nifty50 to move towards 15,915 level, he said.

“If Nifty50 falls below 15,744 level, a retest of the lower end of the band towards 15,630 can’t be ruled out. For the time being, it looks prudent to remain neutral on the index, as the best buying opportunity will arise only on a strong close above 15,900 level,” said Mazhar Mohammad of Chartviewindia.in.

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