Nifty forms dark cloud cover pattern; NCC, Maha Bank buy calls for Jan 31

Nifty View

Nifty has been displaying one day up, one day down pattern for the last 7 sessions. This shows the indecision on the part of investors and traders ahead of the vote on account and US Fed meet.

Nifty has formed a bearish Dark cloud cover pattern on daily charts. It could now face resistance at 21,813 while 21,429 could offer support.

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On Jan 10, the stock broke out from the upward sloping trend line on the daily chart. Price breakout was accompanied with a jump in volumes.

On Jan 18, it witnessed a throwback fall and reversed north, resuming its primary uptrend. It is placed above all important moving averages, indicating bullish trend on all time frames.

Indicators and Oscillators like DMI and RSI have turned bullish on the daily charts.

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The stock price has surpassed the previous top resistance of 52 and has been sustaining above that. In September 2023, it broke out from the long term downward sloping trend line on the monthly chart.

Short term moving averages are trading above long term moving averages, which confirms the uptrend in the stock. Indicators and Oscillators like MACD and RSI have turned bullish on the weekly charts. 

Disclaimer: Vinay Rajani is CMT, Senior Technical and Derivative Research Analyst at HDFC Securities. Views are his own.