The index formed a small bullish candle on the daily chart with a long upper wick, as it could not hold above the key resistance at 11,950. A breach of the 11,950-12,025 zone would be crucial for the index to see further upside, analysts said.
Any strong downside looks unlikely for now, they added.
Gaurav Ratnaparkhi, Senior Technical Analyst at Sharekhan, said the index has crossed the 61.8 per cent retracement of last week’s fall, but its movement got halted near the 78.6 per cent retracement mark near 11,950 level.
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“There are a few hurdles in the 11,950-12,025 range, which the bulls need to cross in order to set the stage for significant upside. A failure to cross these barriers would keep the index in a consolidation phase. On the downside, the 11,850-11,820 zone will offer immediate support and keep the upside intact in the near term,” he said.
For the day, the index closed at 11,896, up 23.75 points or 0.20 per cent.
On Wednesday, if the index slips below 11,837 level, it can attract intraday selling and can make an attempt to bridge the bullish gap formed between the 11,820 and 11,789 levels on October 19, said Mazhar Mohammad of Chartviewindia.in.
“But if the bulls manage to defend the 11,837 level, the trade for the next session can be sideways with a positive bias, with the likelihood of Nifty retesting the recent corrective swing high of 12,025,” he said.
Nagaraj Shetti, Technical Research Analyst at HDFC Securities, said a larger degree positive pattern like higher tops and bottoms is visible on the weekly timeframe chart.
“Though Nifty50 is now placed near higher highs, still there is no confirmation of any higher top reversal yet from the highs as per the weekly chart. Hence, we are unlikely to see the beginning of any sharp weakness from there. Any minor decline/consolidation could be a buy-on-dips opportunity in the short term,” he said.