scorecardresearchTechnical View: Nifty ends in the red for 4th consecutive session; analysts see strong support at 16,000

Technical View: Nifty ends in the red for 4th consecutive session; analysts see strong support at 16,000

Updated: 11 May 2022, 05:04 PM IST
TL;DR.

  • The index opened at 16,270.05 against the previous close of 16,240.05 and touched intraday high and low of 16,318.75 and 15,992.60 respectively. It finally closed 73 points, or 0.45 percent, higher at 16,167.10.

Among the sectors, Nifty IT fell 1.24 percent to end as the top loser, followed by auto and consumer durables indices, falling 0.91 percent and 0.70 percent, respectively. Photo Credit: Pixabay

Among the sectors, Nifty IT fell 1.24 percent to end as the top loser, followed by auto and consumer durables indices, falling 0.91 percent and 0.70 percent, respectively. Photo Credit: Pixabay

Nifty ended in the red for the fourth consecutive session on May 11 as investors remained cautious ahead of the US April inflation data which is due later today.

The index opened at 16,270.05 against the previous close of 16,240.05 and touched intraday high and low of 16,318.75 and 15,992.60 respectively. It finally closed 73 points, or 0.45 percent, higher at 16,167.10.

Among the sectors, Nifty IT fell 1.24 percent to end as the top loser, followed by auto and consumer durables indices, falling 0.91 percent and 0.70 percent, respectively. Nifty Bank index closed 0.61 percent.

Technicals

Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities pointed out that although the larger texture of the market is still on the bearish side, we could see a sharp pullback rally in the near future due to markets being in oversold territory.

"For the traders, 16,000 would act as a sacrosanct support level and above the same, a pullback rally is likely to continue up to 16,300-16,400 levels. On the flip side, dismissal of 16,000 could increase further weakness up to 15,940-15,900,” said Chouhan.

Palak Kothari, Research Associate at Choice Broking said Nifty has taken support from the lower band of Bollinger on a four-hourly chart which is a sign of short-term reversal in the counter.

However, the momentum indicators RSI bounced from the oversold zone as well as divergence has been seen on an hourly chart which indicates bounce back momentum.

"The Nifty may find strong support around 16,000, while on the upside, 16,400 may act as an immediate hurdle for the Nifty, crossing above the same can attract fresh buying," said Kothari.

"Despite remaining choppy throughout the trading session, this counter managed to recoil a substantial part of the intraday losses which resulted in a hammer kind of formation," said Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in.

Mohammad added that this kind of formation should have bullish connotations provided it is followed by a positive close in the next trading session. Moreover, our twin momentum oscillators, whose accuracy is higher around short-term turning points, are in buy mode.

"We continue to look for a pullback trade, which if materialises, should initially take the indices towards 16,650. Contrary to this, a close below 16,000 would eventually lead to the retest of March lows present at around 15,670. For the time being, traders are advised to remain neutral and wait for some signs of strength before playing for a pullback trade," said Mohammad.

Disclaimer: The views and recommendations made above are those of individual analysts and not of MintGenie.

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First Published: 11 May 2022, 05:04 PM IST