The Nifty bounced back from its 13-days exponential moving average (DEMA) placed at 9,175 yet again on Tuesday and made a bullish candle on the daily candlestick charts.
Bulls managed to push the index beyond its crucial resistance level of 9,200. It also formed a two-candlestick pattern, popularly known as ?bullish engulfing? pattern on the daily charts.
A bullish engulfing pattern is made up of two candles and is formed when a small black candle is followed by a large bullish candle that completely engulfs the previous day?s candle.
Formation of bullish engulfing pattern signifies that bulls have taken control over D-Street from bears as witnessed in the previous trading session. It indicates immense buying interest and investors should continue with their long positions with a stop loss below 9,170.
?The Nifty appears to have once again taken support on its 13 Day Exponential Moving Average before strongly bouncing back to register Bullish Engulfing formation on the charts. Sustaining above the said average one can expect Nifty to retest its previous peak of 9274 levels,? Mazhar Mohammad, Chief Strategist ? Technical Research & Trading Advisory, Chartviewindia.in told moneycontrol.
?We recommend traders to initiate fresh long positions with a stop below 9,170 levels and ride this rally for initial targets placed around 9,350 levels and trend shall continue to remain positive as long as Nifty trades above the said average,? he said.
The Nifty index opened on a flat note at 9184.55 tracking muted trend seen in other Asian markets and slipped to its intraday low of 9,172.85. It rose to an intraday high of 9,242.70 before closing the day 55 points higher at 9,237.
?The Nifty index managed to find support near to 13-DEMA yet again and formed a bullish engulfing pattern on the daily chart. It has crossed and closed above previous day?s high of 9225 and given a grip in the bulls hand,? Chandan Taparia, Derivatives and Technical Analyst at Motilal Oswal Securities told moneycontrol.
?It has negated its formation of lower highs seen in the last three trading sessions and now requires a hold above 9,250 to witness a fresh up move towards 9,280 and then towards 9,350 while on the downside supports are seen at 9,191 and 9,170,? he said.