Bullish engulfing candle
Bullish engulfing candle: New Delhi: Nifty50 on Friday climbed for the third straight day and topped the 17,100 level on a closing basis. During the day, the index took out its 200-day simple moving average with a gap-up start earlier in the day and reflected strength.
The index formed a bullish candle on the daily scale. On the weekly scale, it formed a solid bullish candle, with a long lower wick, suggesting buying at low.
Friday’s gap-up opening paved the way for a strong close above the 200-day SMA, whose value is placed around the 17,025 level, said Mazhar Mohammad of Chartviewindia.
Technical View | Nifty, Bank Nifty form bullish engulfing candle; bulls back in action ahead of Fed meet outcome
Mohammad said that the index signed off the month with a Bullish Engulfing formation on the monthly charts, hinting at improving sentiment.
“If the index sustains above 17,018, it can extend the upswing towards 17,550 where a slew of resistance points are placed. However, the swift up move from the lows of 16,438 to a high of 17,170 in just three trading sessions can lead to some consolidation or profit booking,” Mohammad said.
For the day, the index closed at 17,158.25, up 228.65 points or 1.35 percent.
Technical View | Nifty forms a Bullish Engulfing pattern on a monthly scale, 17,500 is the next hurdle
Gaurav Ratnaparkhi at Sharekhan said that the index received support near last week’s gap area.
“Thereon the index had a sharp rally as the week progressed. And today, it crossed 17,000. In terms of the technical parameters, it has scaled above the 61.8 percent retracement of the April–June decline and the 200 DMA. Thus, the index can continue to stretch higher as long as it stays above 17,000. On the higher side, it can test 17300 in the short term,” Ratnaparkhi said.
Kunal Shah, Senior Technical Analyst at
said that the Nifty Bank index remains in a buy-on-dip mode, with immediate support at the 36,800 level.
Basics of Technical analysis: Bearish and Bullish Engulfing Pattern
“The upside resistance stands at 38,000 where the highest open interest is built up on the call side,” he said, adding that once it is breached, a further rally towards the 38,500-39,000 range is likely.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)
The Nifty50 has recouped all its previous day’s losses and formed a bullish engulfing candlestick pattern on the daily charts, indicating that bulls are back in action ahead of the outcome of the two-day Federal Reserve meeting tonight.
The index has got strong support at the bullish gap area of 16,490-16,360 created on July 20. Hence, if the index sustains the same in coming sessions, the 200-day simple moving average (17,033) can be the next possible target, experts said.
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A bullish engulfing pattern is also known as a reversal pattern, which is generally formed after the downtrend. In this pattern, the green candle completely covers the previous red candle.
The bounce back was led by most sectors with Nifty Bank, IT, and Pharma indices gaining 1-2 percent. But the trend in broader space was not the same as benchmarks. The Nifty Midcap 100 index gained 1.11 percent and the Nifty Smallcap 100 index closed flat as the market breadth was not very strong. About five shares advanced against four declining shares on the NSE.
The Nifty50 opened flat at 16,475 and after an initial hour of volatility, the index gradually gained strength to hit an intraday high of 16,653. Finally, the index settled at 16,642, up 158 points.
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A small red/black candlestick is followed by a large white candlestick that completely eclipses or “engulfs” the previous day’s candlestick Technical
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Find today’s Bullish Engulfing candlestick stocks. This signal is a strong reversal signal when it appears at the bottom.