NEW DELHI: Snapping a five-day losing streak, the Nifty50 closed above the 11,050 level on Tuesday and, in the process, formed a Piercing Line pattern on the daily chart.Such a two-day pattern is formed when the opening level is lower than the previous days opening level and at close a bullish candle is formed, whose close is above the middle of Day 1s bearish candle.Any upside going ahead could be met with selling pressure, say analysts.
For the day, the index rose 100 points, or 0.91 per cent, to 11,067.It formed a Piercing Line pattern on the daily scale, as it drifted below the previous days low, but managed to recover above half its losses, said Chandan Taparia of Motilal Oswal Securities, who believes the index would require to hold above 11,080 to witness any bounceback.Sell on rise would be the preferred trading strategy with the 11,150 and 11,200 levels offering a fresh shorting opportunity, said Gaurav Ratnaparkhi of Sharekhan.He noted that hourly momentum indicators were beaten down and were in the oversold region.
The pullback can stretch further till 11,150 and 11,200 levels.
In terms of the wave structure, the upward move is a countertrend move and is likely to be followed by next down leg, he said.A downside is likely should the index break below the immediate support at 10,882, while any further pullback could find resistance at 11,170, said Subash Gangadharan of HDFC Securities.Both daily strength indicator RSI and momentum indicator Stochastic are in the negative zone, which indicates that there would be selling pressure on the higher side, said Rajesh Palviya of Axis Securities.Mazhar Mohammad of Chartviewindia.in advised traders to refrain from creating fresh shorts unless some signs of weakness are visible.