The Nifty closed on a strong wicket with almost 1 per cent gain on Tuesday. During the session, towards the end, Nifty kissed its crucial resistance of 20 days EMA, placed at 18063.
For last four trading sessions, Nifty has been hitting higher highs and higher lows, which is a sign of accumulation. There have been multiple bottoms in the range of 17,750-17,800, which has become floor for the Nifty in the short term.
Sustainable level above 20 days EMA (18063), could pull Nifty towards the next resistance of 18,265. Any level above 18,265, would negate the positional down trend in the Nifty.
Last close: Rs 569.80
Targets: Rs 600; Rs 624
Stop-Loss: Rs 550
The stock has formed double bottom formation at Rs 560 on weekly charts and turned north. RSI oscillator has exited the oversold zone on the daily chart. Stock price has surpassed the short term resistances of 5 and 10 days EMA with jump in volumes.
(Vinay Rajani, Senior Technical and Derivative Research Analyst at HDFC securities. Views expressed are personal).