stock market analysis: Tech View: Bullish engulfing candle on monthly chart reflects improved sentiment

The index formed a bullish candle on the daily scale. On the weekly scale, it formed a solid bullish candle, with a long lower wick, suggesting buying at low.

Friday’s gap-up opening paved the way for a strong close above the 200-day SMA, whose value is placed around 17,025 level, said Mazhar Mohammad of Chartviewindia.in.

Mohammad said that the index signed off the month with a Bullish Engulfing formation on the monthly charts, hinting at improving sentiment.

“If the index sustains above 17,018, it can extend the upswing towards 17,550 where a slew of resistance points are placed. However, the swift up move from the lows of 16,438 to a high of 17,170 in just three trading sessions can lead to some consolidation or profit booking,” Mohammad said.

For the day, the index closed at 17,158.25, up 228.65 points or 1.35 per cent.

Gaurav Ratnaparkhi at Sharekhan said that the index received support near last week’s gap area.

“Thereon the index had a sharp rally as the week progressed. And today, it crossed 17,000. In terms of the technical parameters it has scaled above the 61.8 per cent retracement of the April–June decline and the 200 DMA. Thus, the index can continue to stretch higher as long as it stays above 17,000. On the higher side, it can test 17300 in the short term,” Ratnaparkhi said.

Nifty Bank

Kunal Shah, Senior Technical Analyst at

said that the Nifty Bank index remains in a buy-on-dip mode, with immediate support at 36,800 level.

“The upside resistance stands at 38,000 where the highest open interest is built up on the call side,” he said, adding that once it is breached, a further rally towards the 38,500-39,000 range is likely.

(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)