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Below is the Views On Market Wrap-up by Mr. Ruchit Jain (Equity Technical Analyst, Angel Broking)
“The index continued with the negative momentum post opening and corrected during the day to breach the swing low of 11614.50.However, it recovered from the low of 11537 in the later half and ended the session well above 11600 with a cut of about four-tenths of a percent.
Our markets continued with the sell off recently seen and it breached the swing low of 3rd February during the day. However, it managed to find support around the lower end of a channel and recovered much of the intraday losses. This tail end recovery has led to formation of a ‘Hammer’ pattern on the daily chart of Nifty as well as the Bank Nifty index. This pattern is usually termed as a reversal pattern and a formation of the same near the support after a corrective phase implies probability of an up move in the near term. A crossover above today’s high of 11664 will activate the pattern and thus traders are advised to look for buying opportunities if the index surpasses today’s high. On the flipside, today’s low of 11536 will be seen as a sacrosanct support which could be referred as stop loss level for long positions. Above 11664, Nifty could attempt to retrace at least 38.2% (Fibonacci ratio) of the recent correction which is seen around 11770.
The Bank Nifty, Nifty Metal, FMCG and the Auto indices have formed a reversal candlestick pattern on their daily charts similar to the Nifty index and hence, stocks from these sectors could be in focus if they surpass their today’s respective highs. ”
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