Technical View: Nifty forms a ‘Hammer’ pattern on weekly charts; upside likely

The Nifty50 moved in a narrow range of 40 points and closed flat towards the close of the session with a positive bias on Friday and made a bullish candle on the daily charts and a ‘Hammer’ like pattern on the weekly charts.

A Hammer like pattern on weekly charts suggests further upside in the coming week, but a confirmation is still required before we can conclude that the bulls can now take control of D-Street.

The Nifty50 index witnessed two-consecutive days on which it had a touch-and-go-moment with 10,800. A close above 10,808 which was the intraday high formed on Thursday, February 21 confirms the theory, suggest experts.

The Nifty50 which opened at 10,782 reclaimed 10800 to hit an intraday high of 10801. It slipped towards 10750 to touch its intraday low of 10758 before closing the day at 10,791, up 1.80 points.

“It appears to be the day of consolidation on the bourses as Nifty50 remained in a tight range of 43 points throughout the trading session with almost forming an indecisive formation after two days of smart recovery. However, on weekly charts a beautiful Hammer formation is visible as the market rallied from the lows of 10585 in the last week,” Mazhar Mohammad, Chief Strategist – Technical Research & Trading Advisory, Chartviewindia.in told Moneycontrol.

“Usually this kind of formations shall have bullish connotations for the near term but confirmation in this regard will come once Nifty50 gets past 10808 levels. In such a scenario initial target will be around 10930, and a breach of which on a closing basis on the upside shall further cement the momentum thereby expanding the current upswing toward 11030 kinds of levels,” he said.

Mohammad further added that in the near-term Nifty may come under selling pressure if it slips below 10721 on a closing basis. Hence, traders are advised to book profits in long positions if the index were to close below 10720 levels.