According to Sudeep Shah, Head - Technical and Derivatives Research at SBI Securities, chart pattern formations offer early signs of stabilisation, but need confirmation through follow-up bullish momentum over the next couple of trading sessions to establish the possibility of a sustained reversal in the Nifty 50.
The 22,200–22,250 zone will serve as a crucial support area, while on the upside, the 22,750–22,800 zone remains a key resistance band that the index must overcome to strengthen the recovery, he said in an interview with Moneycontrol.
Meanwhile, Sudeep Shah bets on Radico Khaitan, and Karur Vysya Bank. "Radico Khaitan trades above key moving averages on both the daily and weekly timeframe and the stock has nearly engulfed previous week’s candle, indicating that the bulls have a firm grip in the counter over the bears, while with the consolidation breakout, the RSI has started moving higher sharply, indicating strong bullish momentum in Karur Vysya Bank," he said.
Do you expect the Nifty 50 to rebound towards 22,800–23,000 next week, given the Bullish Harami pattern on the daily chart and the Doji formation on the weekly chart? What levels must the index reclaim to confirm a sustained recovery?
The benchmark index Nifty has snapped its eight-week losing streak, its longest weekly losing streak since 2001, by ending the week with a modest gain of 0.44 percent. The index formed a Doji candlestick on the weekly chart, while the daily chart witnessed the formation of a Bullish Harami pattern. Notably, both formations have emerged near a crucial support confluence comprising the 200-week EMA and the lower trendline of the rising channel. With multiple reversal signals emerging near a critical support zone, the key question is whether the bears are finally losing their grip?