Nifty50: Tech View: Nifty50 targets 18,000 but profit booking cannot be ruled out

NEW DELHI: Nifty50 climbed higher on Tuesday for the third consecutive session and in doing so closed above the 17,800 level. The index formed a bullish candle on the daily chart with a long wick, suggesting that the intraday decline has been purchased. Analysts are not ruling out some profit taking at the highs, although they believe Nifty50 touching the 18,000 level is a possibility.

Nifty50 has seen a vertical rise for the past 11 trading sessions from a low of 16,410 to a high of 17,827, which facilitated a “buy” signal on the daily MACD chart.

“Usually one observes that such buy signals after a vertical move will open the way for a small break before resuming the upward move. The next session can be a perfect opportunity to take profits and wait for more clarity. a slightly deeper cut can be expected if Nifty50 closes below the 17,590 levels, which now looks like a buying opportunity for a logical target of 18,135,” said Mazhar Mohammad of Chartviewindia.in.

For the day, Nifty50 closed at 17,805.25, up 179.55 points or 1.02%. The index formed higher highs and lows in the past three sessions and gave the highest close in 32 sessions, said Chandan Taparia of Motilal Oswal Securities, who believes that the hold above the level 17,777 could lift the index towards the 18,000 and 18,200 levels. This analyst sees index support at the 17,600 level.

Sharekhan’s Gaurav Ratnaparkhi said Nifty50 passed some crucial near-term hurdles, which fueled the ongoing rally. “The index is looking to extend beyond the 61.8% retracement of the entire October-December decline. Nifty50 is about to test 18,000 on the upside. The hourly chart shows the end upper side of a bullish channel is also present near the 18,000 mark. There, Nifty50 is likely to consolidate its recent gains,” he said.

Ratnaparkhi said the index’s short-term support zone has moved higher, along with the major hourly moving averages and the lower channel line. This range is currently between 17,600 and 17,500, he said.

Independent analyst Manish Shah said there is a chance that Nifty50 will see a few days of correction and drop towards 17,600-17,650. “If Nifty50 breaks and holds above 17,880, the move should continue around 18,200-18,250,” he said.