Tech View: Nifty50 forms 'Hammer' like pattern; 8,250, 8,275 levels key for bulls

The Nifty50 recovered smartly on Tuesday and reclaimed its crucial resistance level at 8,200. However, analysts still maintained their cautious stance ahead of the outcome of the US Federal Reserve's rate-setting meeting on Wednesday. The Nifty50 formed a Hammer-like pattern on daily candlestick charts.

A classic 'Hammer' is formed when the index trades significantly lower than its opening price for most part of the day, but it manages to recoup losses and close either above or near its opening level. It has no or a tiny upper shadow, a small body, and a long lower shadow.

However, in Tuesday's price action, the Nifty50 rose to an intraday high of 8,228.85, which made a slightly long upper show and a slightly long body. Hence, it is best to say that the index formed a small bullish candle or a Hammer-like pattern on the candlestick chart. It closed above its crucial 200-day DMA placed at 8,207 level.

However, traders should not make decisions based on one candlestick pattern and wait for further confirmation as Thursday's price action will be crucial post the US Federal Reserve outcome, suggest experts.

A close above 8,250-8,275 levels is required for the bulls to regain strength on D-Street while a slip below 8,150 could add to selling pressure, suggest experts. "The index has to cross and hold above 8,250 zones to witness and up move towards 8280 and 8335 zones amid the FOMC outcome on coming session," Chandan Taparia, Derivatives & Technical Analyst - Equity Research at Anand Rathi Financial Services, told ETMarkets.com.