Tech View: Nifty50 forms Bullish Piercing Line pattern, signals reversal

Nifty 50 broke two day’s decline on Tuesday and formed a bullish candle on the daily chart. It also formed a bullish piercing line pattern, which is indicating a possible reversal. Analysts say a follow-up buying could indicate a short-term bottom.

Nagraj Shetty, Technical Research Analyst,

In general, such a bullish piercing line pattern after an appropriate downtrend indicates an upside reversal of a short-term downtrend, the securities said.

“It also reflects the strength of a pullback rally followed by a sharp weakness. Hence, a bounce can be expected in the short term,” Shetty said.



For the day, the index closed 86.80 points or 0.5 per cent higher at 17,577.50.

Mazhar Mohamed of chartviewindia.in said follow-through buying in the next session could suggest that there is a temporary bottom at 17,345.

“In that scenario, the index may attempt to bridge the bearish gap between the 17,690 and 17,710 levels recorded on August 22, and a close above 17,710 could further strengthen the bulls’ optimism. Conversely, 17,345 The downside, at close, may resume weakness towards the 17,000 and 16,950 levels,” he added.

nifty bank
Nifty Bank closed at 38,697.65, up 399.90 points or 1.04 per cent.

Senior Technical Analyst Kunal Shah said that the banking index has seen a sharp recovery from lower levels and has formed a strong bullish reversal candle.

Shah said the index support is in the 37,700-38,000 zone and as long as this support remains the index remains in buy-per-dip mode.

“The immediate upside barrier is 39,000 where call writers are active and once it is crossed further short covering will be visible,” he added.

(Disclaimer: Recommendations, suggestions, views and opinions given by experts are their own. They do not represent the views of The Economic Times)

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https://economictimes.indiatimes.com/markets/stocks/news/tech-view-nifty50-forms-bullish-piercing-line-pattern-signals-reversal/articleshow/93733999.cms

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