NEW DELHI: Nifty50 formed a Bullish Harami candle on the daily chart on Wednesday, suggesting that traders are cautiously optimistic ahead of the general elections outcome due on Thursday. Expect huge volatility through the day, analysts warned.
For the day, the index rose 28 points, or 0.25 per cent, to end at 11,737.
“The index formed a Tweezers Bottom candlestick pattern, along with a Bullish Harami, which suggests the bulls are in control of the market. Moreover, the gap between 11,425 and 11,590 levels formed post exit poll results is still intact, which could act as a crucial support in the event of profit booking. A trade below the 11,680 mark being the Tweezers Bottom low can drag the index to 11,590 and 11,425 levels,” said Aditya Agarwala, Senior Manager, Technical Analysis at YES Securitie
On the flip side, a sustained trade above 11,800 can extend the upward move to 11,890 and 12,050 levels. The index is expected to witness wild swings in trade through the vote count.
Mazhar Mohammad of Chartviewindia.in said there has neither been a follow through to the bearish pattern registered on May 21, nor has there been any continuation of euphoria on the upside, suggesting caution on the part of market participants
“In case of a market-friendly election outcome, the index may head towards the major resistance zone between 12,000 and 12,100 levels after forming a short-term top around the range. Traders are advised to book profit by making use of this rally. Similarly, a negative outcome shall fill the bullish gap present between 11,591 and 11,426 registered on May 20. “In such a scenario, downside can be much higher with initial targets placed around 11,000 level,” he said.
If the outcome is positive, the index can move towards 11,888 and attempt to hit the psychologically important 12,000 mark, said Chandan Taparia of Motilal Oswal Securities. A major support exists at 11,550.
Source: Economic Times