The Nifty on Friday settled shy of the 10,700 mark, as the index formed an Inside Bar on the daily chart and remained below its 200-Day Moving Average (DMA).
Analysts believe that one should not read too much into Fridays gains unless the index closes above the 10,748 level.Mazhar Mohammad, Chief Strategist Technical Research Trading Advisory, Chartviewindia said, Nifty50 registered an Inside Bar kind of formation as Fridays range is confined to the limits of preceding days trading session.
However, as Nifty50 registered a decisive breakdown below its 200-DMA with a gap down on Thursday, the said index may remain under pressure unless it closes above 10,748 level and weakness shall get extended on breach of 10,588.For the day, the 50-share index gained 92.55 points, or 0.87 per cent, to 10,693.
The index swung between a high and low of 10,704.55 and 10,599.35, respectively.Investors are awaiting state elections outcome due December 11, which may give further direction to the market.Traders are advised to focus on a larger picture and maintain a bullish stance only on a fresh breakout above 10,950 levels on closing basis.
Post-event if the market fails to sustain above 10,750 on a closing basis, then there will be a bright chance of resuming downtrend with initial target of 10,450, Mohammad.Nifty needs to hold 10,550 to 10,580 for the new round of momentum and for this rally to sustain, said Vaishali Parekh, Senior Technical Analyst at Prabhudas Lilladher.If this occurs, the index may cross 10,740 and thereafter 10,950.
Market is likely to remain volatile next week because of the elections outcome.
Failing of 10,550, may take the market to 10,400 level, Parekh added.