The Nifty recouped morning losses and climbed 10,500-10,550 levels to close just a shade below its crucial resistance levels of 10,600 levels on Tuesday. Robust IIP data for the month of September, cool off in inflation numbers as well as fall in crude oil prices added to the tailwind.
The strong rally seen in the index took shape of a Piercing pattern which signals a temporary halt to the downtrend. The pattern is formed by two consecutive candlesticks.
The first candlestick is a strong red candle or a bearish candle which is followed by a green or a bullish candle. The bullish candle should cover at least half of the previous day’s red or bearish candle. It is a potential signal for a reversal.
The S&P BSE Sensex recouped previous session losses and reclaimed 35000 while the Nifty rallied over 100 points and reclaimed 10,550 levels on closing basis which is a positive sign.
On the upside, 10600 is acting as a crucial resistance level for the index. This is the fourth straight session in which we saw Nifty facing selling pressure, the moment it comes near 10600-10650 levels.
According to Pivot charts, the key support level is placed at 10,483.27, followed by 10,384.03. If the index starts moving upwards, key resistance levels to watch out are 10,638.97 and then 10,695.43.
The Nifty Bank index closed at 25,768.6 on Tuesday. The important Pivot level, which will act as crucial support for the index, is placed at 25,503.3, followed by 25,238.0. On the upside, key resistance levels are placed at 25,915.2, followed by 26,061.8.
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