The last day of the week ending May 19 saw a market rebound, bringing hopes of further upward movement. The Nifty50, a key index to watch, reclaimed the crucial level of 18,200. Despite a 0.6% loss and closing at 18,203.4 last week, the index has maintained a pattern of higher highs for eight consecutive sessions, indicating a positive trend. The relative strength index (RSI) at 59 levels on the daily charts suggests a positive bias, and the moving average convergence divergence (MACD) on the weekly scale has shown a positive crossover above the zero line.
On the weekly charts, the index formed a bearish candlestick pattern with long upper and lower shadows, reflecting volatility. However, there was a bullish hammer-like pattern formation on Friday, which is considered a potential reversal pattern. Experts suggest that if the index sustains above the 18,200 level, there is a possibility of reaching 18,300-18,500 in the coming days. The psychological support level is seen at 18,000.
According to Analyst specializing, the recent correction was expected after a decent run, but the overall chart structure remains strong, with bulls successfully maintaining pivotal support.
The firm defense of the 18,050-18,000 level highlights the significance of pivotal support and is anticipated to serve as a crucial anchor during the corresponding period, according to the analyst. On the higher side, the range of 18,400-18,450 is expected to act as a robust resistance, and a decisive breakthrough would potentially trigger fresh long positions in the system going forward.
Our research, emphasizes the upcoming week’s significance for the market as it will determine the trend for the next phase. We suggest that the 18,200 level is expected to provide strong support, and if it holds during the current week, the Nifty is likely to advance towards the levels of 18,500-18,600. Additionally, the Nifty is trading above its 200-day Exponential Moving Average (EMA) at 17,636, which indicates strength in the market.
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