NEW DELHI: Nifty50 on Monday hit the 18,000 mark, only to close below its recent hurdle of 17,950. The index ended up forming a bullish candle on the daily chart with a long upper wick, suggesting selling pressure at higher levels. Analysts said the index has support at 17,840, below which some selling pressure can set in. On the upside, they see resistance at 18,000 and 18,130 levels.
Mazhar Mohammad of Chartviewindia.in said that it looks critical for this index to sustain above 17,839 level to prevent near term weakness. Ruchit Jain of Angel Broking holds a similar view. This analyst sees support levels at 17,900, 17,840 and 17,770 levels. Jain sees resistance for the index at 18,130.
“Sustaining above the 17,839 level can push the index towards 18,100 -200. A fall below the same should induce further profit booking on an intraday basis, with initial target present at 17,613 level. It looks prudent to hold long index positions if any with a stop below 17,839 level,” Mohammad said.
Jain said the trend still remains positive but one needs to be very selective in picking stocks from a short term perspective.
For the day, the index closed at 17,945.95, up 50.75 points or 0.28 per cent. This was the third straight session when the index formed a higher high.
Gaurav Ratnaparkhi of Sharekhan said the index is currently trading near a make or break level. If it manages to cross 18,000 on a closing basis, the consolidation will be considered to have broken on the upside and the Nifty50 will then be set for a significant upside, he said.
“However, a failure to cross 18,000 on a closing basis would keep the index in the short term consolidation phase. The key hourly moving averages, which are currently near 17,900-17,850 will continue to act as an immediate cushion on the downside,” he said.
The MACD line has turned and this is a positive trigger for Nifty, said independent analyst Mahish Shah who added that the directional movement shows a hook and that too is a positive development.
“The probability favours a bullish breakout. Nifty50 should see a rally to 18,150-18,250 once a sustained break above 17,950 holds and sustains for a day or two,” he said.