From past 3 trading days, nifty witnessed severe profit booking from 12430 to 12087.
Nearly 343 points fall from highs. As mentioned in previous update, lower gap existed at 12133-12045 acting as support for Bulls.
As per today's opening pattern, it clearly visible that bulls applied breaks to correction and stepped in. Formed Bullish Harami pattern as per Candlestick analysis. It is possible that Short covering action lifts market further upward direction. Similar candle pattern clearly visible in Banknifty charts.
Technical indicators like MACD , RSI clearly showing trend changing signals.
As we approaching near to expiry week, short covering rally can begin from current levels. In doing so, nifty has to break out first swing high, which is placed at 12230. Once Bulls succeeds in breakout this 12230 swing high, we can expect this momentum to pick up more upside direction.
Many of high beta stocks completed minor corrections from higher levels, can attract bulls for taking long positions.
Resistance 12230.
Support zone 12130-12045 gap zone.
Regards,
Suryadev Bandari
Research Analyst
www.earningwave.com
