NEW DELHI: The Nifty50 climbed for the second straight session on Friday and formed a Hammer candle on the daily chart for the third c onsecutive day, suggesting emergence of buying interest at intraday lows.This was supplemented by a the formation of higher high and higher low pattern on the daily chart, which is a positive signal.
Some analysts believe the index has not yet formed its short-term bottom and the ongoing momentum may not sustain for long.For the day, the index rose 52.20 points, or 0.45 per cent, to close at 11,589.
During the day, it briefly breached the 11,600 level, which coincided with its 13-day moving average.Though the market is witnessing buying at lower levels, there is still a higher possibility of Nifty forming lower tops for the near term.
Hence, the current upward move is unlikely to sustain for long.
As per weekly timeframe chart, the Nifty50 has formed a long bear candle with a long lower shadow.
Technically, this weekly pattern resembles a bearish engulfing pattern, said Nagaraj Shetti of HDFC Securities.Participation is getting wider and the bulls could aim to get past the 11,700 level.
That said, it would be early to conclude that the bottom is in place, said Mazhar Mohammad of Chartviewindia.in, who advised traders to book profit around the 11,680 level.
He advised traders to place a stop loss at 11,470.The index needs to hold above 11,550 to extend its bounce towards 11,620 and then 11,666 levels.
On the downside, supports are seen at 11,500 and 11,450 zones.