Banking and finance

Tech View: Nifty50 in overbought zone; consolidation looks imminent

NEW DELHI: Just like the previous couple of periods, Nifty50 on Monday noticed a gap-up begin. However in contrast to the current bullish candles, the index ended up forming a Doji-like candle on the day by day chart, suggesting merchants have turned indecisive above the 18,500 stage. Analysts stated sure indicators are suggesting the index is within the overbought zone. A consolidation is within the offing, they stated.

Gaurav Ratnaparkhi of Sharekhan stated the short-term momentum indicators have been pushed into the overbought zone and they should cool off to create additional room on the upside.

“The index can witness a short pause close to the 18,500 stage, earlier than marching in direction of the 19,000 stage. Alternatively, the instant assist zone is positioned within the current hole space of 18,445-18,350,” Ratnaparkhi stated.

Monday’s gap-up begin was the fourth one from the corrective swing low of 17,452 stage registered on October 1 from the place this whole leg of upswing unfolded, stated Mazhar Mohammad of

“With this run away up-move of just about 1,100 factors in simply 10 periods, the market might need reached a degree the place consolidation appears to be like inevitable,” he stated.

For the day, the index closed at 18,477.05, up 138.50 factors or 0.76 per cent.

Shrikant Chouhan of Kotak Securities stated the Doji Star candle suggests a brief overbought scenario however the short-term development remains to be constructive.

“Resulting from overbought formation, the bulls could take a warning stance close to the 18,600-18,650 resistance vary. For day-traders, 18,400 could possibly be the development decider stage. Above the identical, the uptrend formation will proceed as much as 18,600-18,650 ranges,” he stated.

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