Undertone stays bullish

Weekly Technical Analysis

The Nifty made a 'strong white candle' on the last day of the week in daily and weekly charts. According to Asit C Mehta Investment, a technical analysis firm, both the stochastics are in the highly over-bought zone.

The 14,3,3 stochastic is still in the buy mode, while the 5,3,3 stochastic may generate a fresh buy signal with a further rise. The relative strength index (RSI) is in the positive mode. However, it is nearing the over-bought zone.

The five-day simple moving average (SMA) is providing good support during the last 10 days on a closing basis. Any daily close below the 6,183 level may be an earlier indication of the short-term weakness. The ten-day SMA has breached the 20-day SMA and is moving upwards. All these show that the undertone is bullish.

The weekly charts display early signals for a further rally. Both the stochastic and RSI generated a fresh buy signal during the last week.

The Nifty is expected to show some early weakness, which may be a short-lived one. However, the undertone is still bullish. The index is nearing the retracement resistance levels and it may act as strong resistance on the upmove.

The Nifty sees resistance at 6,305 (strong for the short term). Any decisive trade above this level will lead the Nifty to 6,351, 6,450 and 6,499.

A close below 6,153 will delay the upmove to these levels. On the other hand, the Nifty has support at 6,222, 6,153 (on a closing basis), 6,114-6,130 (strong for the short term), 6,038 and 5,946 (strong for the medium term).