The Nifty50 falls on Friday and settled flat to form a small bearish candle. The index made a Hammer pattern on the weekly chart, as intra-week dips were bought into. The index would face resistance around 10,930-10,950 zone, while it may see support at 10,850 level.
“A small body negative candle has been formed with long lower shadow, which is signaling a high wave type candle pattern. Since this pattern has formed in a sideways range, its predictive value could be less. The underlying trend of Nifty is range bound and further buying could emerge only above 10,950 levels. Important support to be watched for next week is at 10,850,” said Nagaraj Shetti of HDFC Securities.
Structurally, the Nifty seems to be forming a multi-week Ending Diagonal, whose last leg is unfolding on the upside, said Gaurav Ratnaparkhi of Sharekhan.
“Upper end of the pattern is near 11,050 whereas the daily upper Bollinger Band is close to the 11,000 mark, making 11,000-11,050 a crucial area to watch out for. On the flip side, upper-end of the triangular pattern, which is near 10,840, shall now assume the role of a support as per the principle of role reversal,” the expert added.
For the day, the index added 1.75 points, or 0.02 per cent, to 10,906.95. On weekly charts, a decent bull candle is visible.
“At this juncture, technical oscillators are looking mixed. Traders can retain their positive stance as long as Nifty sustains above the 10,800 level on a closing basis and look for a directional move to emerge on a close above 10,980 level,” said Mazhar Mohammad of Chartviewindia.in.