NEW DELHI: NSE’s Nifty50 failed to capitalise on the gap up opening and succumbed to the selling pressure in Monday’s trade. Eventually, it formed an indecisive candle, resembling a Spinning Top pattern.
Continuing with the positive momentum from the last week, Nifty attempted to stretch higher but at the end of the day closed at 18,109.45, up 0.04 per cent or 6.70 points. It hit a high of 18,210.15 and a low of 18,071.30 during the day.
“Nifty extended beyond the 50 per cent retracement of the fall from 18,604 to 17,613, however, it stumbled near the 61.8 per cent retracement. The Golden Ratio mark is at 18,225. The hourly chart shows that the upper end of a rising channel also acted as a barrier for the day,” said Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas.
Analysts said a small negative candle was formed with an upper shadow. This indicates the presence of crucial overhead resistance at 18,150-18,200, as per the concept of change in polarity. This also signals a range bound action in the market at the crucial overhead resistance.
“On the daily charts, Nifty has formed a small bearish candle, which indicates temporary weakness. However, at the same time, Nifty has been consistently taking support near the 20 days SMA and has maintained a higher bottom formation which is broadly positive,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.
“We are of the view that the 20-day SMA would act as a trend decider level for the bulls, and above the same, the uptrend formation could continue up to 18,200-18,275. On the other hand, dismissal of 18,040 or 20-day SMA could possibly open another correction wave till 18,000-17,925,” he added.
The sectoraltrend was also mixed. Defensive sectors like pharma, IT and FMCG names were in demand. At the same time, PSU bank and metals saw selling pressure.
Mazhar Mohammad, Founder & Chief Market Strategist, Chartviewindia.in, said, to retain positive momentum this counter should manage to get past 18,210 levels in the next one or two trading sessions without violating 17,900 levels on the downsides as a fall below 17,900 can aid the bears in establishing the upper hand.
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