Idea Stock View: Nifty50 forms 'Shooting Star' pattern

NEW DELHI: The Nifty index 50 faced resistance at higher level on Friday, as it ended up forming what resembled a 'Shooting Star' on the daily chart. 
Analysts see multiple resistances in the 10,820-850 zone. They say the index option needs to hold above 10,777 to carry on with the positive momentum. Friday's was the fourth consecutive session when the index made higher highs and higher lows. 

The Nifty50 faces multiple resistance points between 10,820 and 10,850 levels, which is the 78.6 per cent Fibonacci retracement level and a downtrend line, respectively. A failure to cross these resistance points can trigger profit booking, dragging the index lower to 10,650-10,540 levels, said Aditya Agarwala, Technical Analyst at YES Securities. 

For the day, the index rose 22.90 points, or 0.21 per cent, to 10,772. 

Absence of a followup buying was visible in the market amid sustained supply near key hurdles, said Chandan Taparia of Motilal Oswal Securities. The Nifty50 has to hold above 10,777 to extend its move towards 10,835 level. 

"On the weekly scale, the index has formed an Inside Bar and a Hammer candle, but at the same time it is forming lower highs from last three weeks," Taparia said. intraday stock cash tips

Mazhar Mohammad of Chartviewindia.in said the index made a Shooting Star-like formation on the daily scale, as it witnessed mild profit booking from day’s high of 10,816. 

"Weekly charts suggest intra-week dips are getting bought into, as has happened on multiple occasions. Even from the Elliot Wave perspective, if a contracting triangle is in progress from the high of 10,930, then the market should come under mild pressure over the next couple of sessions, culminating the last leg of this corrective structure in the form of Wave E. It should also register a higher bottom above 10,560, which should ultimately pave way for a big breakout, Mohammad said. 

Nagaraj Shetti, Technical Research Analyst at HDFC Securities, sees rangebound movement over the next week. Only a decisive move above 10,840 level can have a positive impact in the near term, he said. 

Idea Stock View: Nifty50 forms 'Shooting Star' pattern Idea Stock View: Nifty50 forms 'Shooting Star' pattern Reviewed by Ideal Stock on July 07, 2018 Rating: 5

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