NEW DELHI: Nifty50 on Friday took out its immediate resistance at 12,220 and formed a bullish candle on the daily chart, confirming an upside bounce in the market.
Analysts said the index has the potential to climb towards the 12,290-360 range, and even 12,400 level, in the coming days.
But a Bearish Engulfing Candle on the weekly scale is looking worrisome and, thus, any upside may be vulnerable to selloff, they said.
On the weekly scale, the index formed a Bearish Engulfing-type pattern at the new high of 12,430.
This along with a long lower shadow on the weekly candle could raise concern over the negative pattern confirmation, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.For now, Shetti sees a positive underlying trend for Nifty50.
The index rose 67.90 points, or 0.56 per cent, to close at 12,248.A close below 12,225 next week can set the tone for a sharper correction on downside, said Mazhar Mohammad of Chartviewindia.in.Sustainability of the up-move of last two sessions remains doubtful, even as the current pullback swing has a logical target placed in 12,290-360 range.
Therefore, it looks prudent for traders to book profit as Nifty heads closer to the 12,300 level, he said.
Arun Kumar, Market Strategist at Reliance Securities, said the near-term oscillators continued to be in sell mode, but the index could extend its rise towards the 12,300-12,400 range on back of broad buying interest in the market.
To maintain the current bullish tempo the index has to stay above 12,170, he said.