NEW DELHI: Nifty on Tuesday staged a strong rebound, snapping a seven-day losing spree.
The index, which was in the oversold territory on Monday, formed a Bullish Harami pattern on the daily charts.
Analysts said a bottom for the index could be in the making.The formation of a Bullish Harami candle suggests a possible pause in the corrective wave, said Aditya Agarwala of YES Securities.A sustained trade beyond 11,320 level can extend the gains to the 11,440-11,600 zone, which would cover up the massive gap area created in Fridays session.
On the flip side, a failure to sustain beyond the 11,220 level can lead to fresh selling pressure, dragging the index towards the 11,150-11,000 zone, Agarwala said.For the day, the index rose 170 points, or 1.53 per cent, to 11,303.Mazhar Mohammad of Chartviewindia.in said momentum oscillators have generated a buy signal, which usually acts as a leading indicator of an impending up-move.However, the litmus test for the bulls lies in absorbing the supply pressure emanating from the bearish gap in the 11,384-11,536 zone, which was formed on February 28.
In simple words, if the index moves above the 11,536 level on a closing basis, eventually the decks would be cleared for a bigger up-move.
On the downside, strong support exists in the 11,100-11,036 range, Mohammad said.Nagaraj Shetti of HDFC Securities expects further upside for Nifty in the coming sessions.
The next overhead resistance to be watched, he said, is at 11,420.
He see immediate support for Nifty at 11,210 level.