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Tech View: Nifty forms Inside Bar candle; choppy sessions ahead

NEW DELHI: Nifty50 on Wednesday formed an Inside Bar pattern and also what looked like a Harami Cross on the daily candle, indicating a tug of war between the bulls and the bears. Analysts see choppy trades ahead.

Chandan Taparia of Motilal Oswal Securities said the index formed a high low with support at 14,500 level, but mostly traded inside a trading range.

“The index is hovering near its 50-DMA for the past few sessions and requires a decisive breakout. A hold above 14,600 level may commence the next leg of bullish stance. Technically, the index has formed an Inside Bar and a Harami Cross-like candle, which indicate a war between the bulls and the bears,” he said.

Taparia said a hold above the 14,600 level may extend Nifty50’s gains to 14,700 and 14,880 levels, while downside supports exist at 14,500 and 14,400 levels, respectively.

For the day, the index closed at 14,617, up 121 points or 0.84 per cent. This was the third day when the index formed a lower high.

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“Nifty50 can remain choppy inside the 14,461-14723 range. A close above 14,723 level can be considered as the initial sign of strength, which can expand the bounce towards 14,900 level. A close below 14,461 level can act as a harbinger of a bigger cut with initial targets placed around 14,150 level,” said Mazhar Mohammad of Chartviewindia.in.

Gaurav Ratnaparkhi of Sharekhan said Nifty is attempting to cross the key hourly moving averages, which have been acting as hurdles in the last two-three sessions.

“On the daily chart, Nifty has formed an Inside Bar for which the breakout level on the upside stands at 14,724 level. The overall structure shows the benchmark index is preparing for the next leg of recovery. It looks set to test the 15,000 level on the upside in the short term. The swing low of 14,416 will act as a reversal level of the bullish stance,” he said.

Check out the candlestick formations in the latest trading sessions

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Independent analyst Manish Shah said Nifty50 is toggling in the 15,050-14,250 range for several weeks with no breakout in sight.

“Thursday’s session will see is the expiry of weekly contracts and a break above 14,670 level can create conditions for a nice play on the long side for weekly players. A major support range for Nifty stands at 14,480-14,450,” he said.

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