Nifty Analysis: Tech View: Nifty forms an indecisive Doji, all eyes on 11,900 level now


NEW DELHI: Nifty50 on Monday formed an indecisive ‘Doji’ candle on the daily chart, following a gap-up opening, as the bulls failed to capitalise on the morning gains.

Analysts said the index did not see a followup drop following Thursday’s selloff, which is a sign of relief. But they feel the index remains vulnerable to selling pressure. The 11,900-926 range could pose immediate resistance for the index, they said.

On Monday, Nifty faced resistance at 11,900 and eventually closed at 11,873, up 110.60 points or 0.94 per cent. “The index has formed a ‘Bullish Gap’ area in the 11,820-11,789 range, which will now remain a crucial support area,” said Rajesh Palviya of Axis Securities.

The analyst said the 11,900 level is an important resistance zone to watch out for and any sustainable move above this resistance level may trigger an upside towards the 12,000-12,100 zone.

Check out the candlestick formations in the latest trading sessions

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“Unless Nifty gets past 11,900 level, further strength should not be expected. It will be critical to sustain above Monday’s bullish gap area in the 11,820-789 zone, as a breach of this area on a closing basis can eventually drag the index towards the 11,661 level,” said Mazhar Mohammad of Chartviewindia.in.

Meanwhile, Nifty formed higher highs and lows for the day. The overall market breadth has also started to improve, which is a positive sign, said Nagaraj Shetti, Technical Research Analyst at HDFC Securities.

“After the formation of bearish Engulfing Pattern on Thursday, Nifty saw a bounce for the second consecutive session on Monday. This could raise doubts over the negative pattern implication of Monday’s bearish pattern. As long as the upside limit of 12,025 is not breached, one can’t rule out any profit booking from the highs. A sustainable move above 12,025 level could be considered as a negation of Thursday’s negative candle,” Shetti said.

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Technical oscillators are showing some bullishness. “The MACD indicator is in a ‘buy’ mode and the 14-day RSI has moved above 60. We have a situation where the trend is bullish and the momentum is in the direction of the trend. This market could see a significant rally in the next couple of days,” said independent analyst Manish Shah.

“On the lower time frames, there is a small supply zone at 11,926-11,882 and once this range is taken out we should see Nifty50 moving to 12,000. We see Nifty50 support in the 11,830-11,810 range,” he said.





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