Bullish Momentum Reversal Likely From Current Levels
We’re likely to see the index creeping back to the 11,000 mark over the next few weeks, with 10,650 being an immediate short term target
Photo Credit : PTI
The NIFTY logged its highest one-day rise is nearly two and a half years on Friday, registering its first weekly positive close in as many as six weeks. The unexpected bounce came in the wake of a sudden US$ 5 fall in crude prices, as well as a slight welcome relief for the Rupee.
Dipping below the lower Bollinger Band on an intra-week basis, the index rebounded strongly and formed a classic Bullish Hammer pattern, indicating that a reversal is likely on the cards at this stage. In fact, with the stochastic oscillator nearing the oversold zone on a weekly basis as well as a daily basis, the dual timeframe momentum hypothesis points to a strong likelihood of a recovery in stock prices from current levels.
The current support level is a critical one for the NIFTY, mainly because a reversal from this stage will reaffirm that the broader bullish trend is still intact, as the rebound will have taken place from a level that’s 5% higher than its March ’18 lows, which saw it dipping back into 4 digits.
We’re likely to see the index creeping back to the 11,000 mark over the next few weeks, with 10,650 being an immediate short term target.
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